Boeing's Military Division is Fraught With Risk and Reward Termoil

You don't have to look far until analyzing the Lockheed F-35 program before corporate America is adverse to the risk of winning a bid with the military. Building military equipment is impregnated with a whimsical Military objective. Build the "moon shot" for the military and hope a military fluid and dynamic condition won't impose a penalty on the contractor. The F-35 program did not reach a military satisfaction bench mark early on as the F-35 couldn't even fit an advanced technology helmet on its pilots without a major re-write of programs and capabilities.

Boeing, knowing that corporate investors would love to have a sure bet with military contracts are jumpy when the DoD does a 180 degree course change when it firms up a contract. They call for a stealthy war bird when in fact they are looking for an invisible aircraft after-all. The battle field has changed during the long and drawn out bid process which brings up another crucial point.

Will funding be voted upon during the different stages and maturation of a new military project? The US Congress weighs in on simplistic notions for gaining any sense about whether it should release more billions of dollars after a program reaches the rock and hard place point of development. The F-35 was just awarded the 9th block of 5th generation fighters with only having a 57 block grant from congress. Years in the discussion for the 9th and 10th block authorization has the Congress imposing its will of only awarding Block 9 and ignoring block 10. Lockheed is breathless over this imposition of award and that after the last two years working for a contract allotment of the F-35 next batches.

Boeing watches every little nuance between the military, congress and the awardee. Lockheed got smoked by politics when promised so much at the onset of the F-35 program. However, this is only a speed bump towards building 2,400 F-35 going forward. The 57 F-35's in Block 9 are low production rate aircraft as Lockheed fixes its “moon shot” technology along the trail of program completeness.

Boeing is out of the Moon Shot business for investor’s sake. It is taking a position during the remainder of this decade for mitigating any far reaching risk until program production pays for the last ten years of risk making from its commercial programs, hence a cautious approach on anything military until it can absorb more risk without damaging stock portfolios from around the world. Lockheed is the pilot hole for all military programs going forward. Timing, maybe right for Boeing to partner with either Northrup, Lockheed or itself for 6th generation fighter development on a large scale. Technology sharing is needed for 6th generation ideas.

Subcontracting with "others" can either increase or mitigate risk depending on program complexity. In fact partnering makes the mess too complex for a successful futuristic program unless new purchasing methods are used for conforming the product without inconsistent contribution of all players. Boeing will remain tepid on future military opportunity since the risk is too high for any military rewards obtained at this time.

Donghai Adds Five 787-9's To Boeing's Backlog.

Donghai Airlines has reached a culmination since the Paris Airshow initial commitments, by signing for twenty-five 737 8's and five 787-9's ordered. The culmination has come after several weeks ago when finalizing the 25 Max, and now today it has finalized the Dreamliners. The total 787 orders placed with Boeing 2016 now stands at sixty-six Dreamliners for the year.

ATW: 

China’s Donghai Airlines finalizes Boeing 787-9 order

The recent Dreamliner additions in October include 30 with Qatar, 12 with China Southern, and 5 with Donghai Airlines. The monthly total boosts Boeing's order book by 47 Dreamliners after only booking 19 Dreamliners in 2016 through the month of September. Boeing's Dreamliner booking is not done yet for 2016. There are several more pending orders yet to be booked such as Pakistan's order for eight and the ever looming Emirates order for a huge number. That alone may come in 2017 where Boeing will need to continue its wide body bookings going forward, hence the delay in 777 production decrease announcement, it is suspected that the order will come through and then extend current production levels as it will order a suite of wide bodies. It is rumored that Emirates may have a 100 aircraft order forming while listening to both Boeing and Airbus proposals. 

The Boeing Book may and could exceed over 100 Dreamliners booked in 2016, but it is more likely it will go sub 100 Dreamliners ordered for 2016 as it reaches into the mid Seventies range. Either way Boeing has established a solid order groundwork which will bear more order fruit for the program launching it into a 14 a month production pace in 2017. Reaching greater production levels will enable Boeing to maneuver adeptly in the market place and spurring on more wide body orders going forward. Boeing has demonstrated to customers, the Dreamliner is a complete program before the 787-10 makes its debut.

October 31, 2016 End Of Month

Program Summary Recap has some notable changes as the 787 order book for 2016 grew to 61 units ordered year to date. Also 117 Dreamliners have been delivered, as it is on pace for about 138 Dreamliners for the year.

Fig. 1

Further doodling analysis reflects a backlog shrinkage at a nominal number of -2 units against orders and delivery since 2011.

90 Day recap of 787 Delivery:

Boeing continues to exceed guidance after another 90 day period paces at almost 12 a month 787's projected goal. Boeing and should reach year ending guidance without pause.  

Fig. 2

Program strength is as follows:

Fig. 3

Program production dichotomy of production and by model.

Fig. 4

Program model in process and delivered production report.

Fig. 5  

Boeing 737 Proof Of Concept Comes After First Delivery

Boeing has a significant amount of work to do assuring the 737 Max is the rising star. After the Airbus A320 NEO debacle several of its important customers are less than happy about its NEO orders, when the roll out show its ugly teething woes. Boeing can recoup the single aisle market once its new single aisle 737 Max starts its commercial operations.  The engine will not fall short on the Max and the innovation treatments will not disappoint its customer base. Airbus already has muffed it with Qatar over its NEO program having a less than optimal engine performance metric during first delivery.

Airbus and its engine suppliers will get it right, but not in time for the Max’s run-out in the first half of 2017. A sign that Boeing has its collective head flying high above the problems below. The unknown customer having first receipt will in no doubt be excited happy, and may order more Boeing 737 Max's in turn.

The effort Airbus made offering multi engine options did not have a conclusive result, and it will pay in the market place for this mishap of engine performance. CFM has been building successful engines since the first 737 classic of almost forty years ago. The current iteration of the CFM designed just for the Max, but is included on the Airbus A320 NEO, is not same engine as the Boeing rendition fitting to the Max's low ground clearance profile.

The A320 could go larger in diameter on its CFM Leap 1-A rendition with 78 inches, and where the Boeing configured CFM Leap 1-B goes for 68.4 inches. The law of jet engine physics is the larger the diameter the better the jet engine performance.

The PW A320 gear driven motor hit an early snag as with all new concepts, but customers like Qatar don't want experimental equipment hanging on its business wings, hence the customer burn. Boeing has become a one trick pony with its CFM engine commitment during the history of the 737 program. Don't fix what works just make it better going forward. The Airbus Company striving to be all things to all customers has dabbled in the innovations realm and it has gained Boeing some valuable real estate back exampled by the recent commitment from Qatar for 60 Max. Qatar's word has always been good, so count one for Boeing in the last minutes of "Airplane Wars", Single Aisle Division.

The question now arises, what has Boeing and CFM wrought in the 68" configured Leap-1B. Heat was a great robber of engine performance and a larger diameter engine mitigates that heat as found in the Leap 1-A engine. However, the proprietary differences begin to mount up when mitigation those heat penalties that are attacking the Leap -1B. Boeing co-partnered with CFM on this one, as it refused to budge on the complete redesign of the 737 for bigger diameter engines. It maintained its airplane stance in the sand and made CFM Build an engine significantly smaller in diameter than the Leap 1-A.

But in doing so, CFM and Boeing had to bring rabbits out of the hat fixing the CFM 1-B while meeting industry performance requirements found with commercial aviation customers. Boeing contributed by bringing over from the 787 project key attributes enhancing the 68.4 limits. Boeing made changes to its engine nacelle coming from the 787 program, and added engine chevrons to its engine exhaust end for sound and aero-dynamics.

Placing the engine forward or backward on the wings would affect performance, so Boeing found the sweet spot for high engine performance and moved it to that spot. The plane balance is critical for flight control and efficiency and Boeing doubled down on engine balance for the aircraft.

 

Boeing also made some engine nacelle treatments different than the 737 NG configuration. A person notices when flying a kite that certain things need to be different after first flying attempts are made. It may dip, dive or fly upside down until the kite’s tail or sticks are adjusted. Boeing/CFM with its smaller engine manages the air passing by the wing and engine. They put on some fins in key places on the engine nacelle enhancing movement through the air, mitigating heat build-up, and canceling some drag.

Even though I do not know all the engine secrets, the Max in tests shows a 14% over-all improvement than previous models of its type. Boeing claims supremacy over the NEO. The customer will know who is correct in this argument. However, the important point is that Boeing can and should gain significant ground over Airbus A320-NEO in the market place once the 737 Max delivers, because then Boeing can demonstrate its tricked out 68.4 diameter engine as compared with the 78 inch Neo configured airplane currently in service.

Boeing's 747 Other Shoe Drops As UPS Wears It.

Boeing is having a fantastic fall festival of wide bodied orders. First there was Qatar for 30, 787's, then China Southern for another 12, 787's, and finally there is UPS for 14, 747-8F's. In all, the order book grew in October by 56 big bodies having almost a year's worth of production slots filled up, just from the month's worth of billions on Boeing's books.

Boeing's 747 jumbo snags a $5.3 billion lifeline from UPS:

Boeing's October Fest WB Order Totals

Qantas Weighs 787-9 Options

In theory, an airplane consumes more fuel on a given trip because weight is the single most determiner for flight efficiency. Other than the fact of heading into hurricane force winds or the Jet Stream, those long route runs affect the profitability on any given trip. Qantas is about to receive its first 787-9's and they have trimmed the seat count in order to fly those extended routes in its passenger system. The Qantas advertisers will say more leg room for a more enjoyable passenger experience having a greater seat pitch for each seat. 

Qantas Dreamliner to have more legroom with only 236 seats instead of 270

A marvelous sentiment held by Qantas when in fact it’s all about weight, efficiency and passenger numbers for the long haul. Qantas would like the most passengers for the longest routes going from Perth to London in 8,960 miles. Note: It’s just under 9,000 miles which the 787-9 was built, but Qantas attacks the promotion as a passenger opportunity with a "We are offering more room" campaign.

FAA says this about average passenger weight:

FAA Weight Averages:

The Federal Aviation Administration sets an average weight per traveler and carry-on luggage to estimate how much weight planes will carry. According to "The New York Times," the average weight assigned to each passenger by the FAA is 200 pounds for men, 179 pounds for women and 76 pounds for children under 13. These estimates include 16 pounds per person of carry-on luggage and averages in the weight of winter and summer clothing.

Not included in this model is the passenger luggage weight for each passenger which can vary from traveler to traveler.

Qantas will be taking delivery with its 787-9's having 236 passengers on its long range 9,000 mile flights instead of having seating with 270 passengers. This gives me another number crunching opportunity for the significance of Qantas cabin configuration of 236 seats.

If an 787-9 with 236 passengers and half are men and the other half women it means the airliner has to pack on 118 men X 200 lbs. and another 118 women weighing 179 lbs. with carry-on for the trip. The subset weight for men equals 23,600 lbs. and for women 21,229 equaling a total of 44,722 passenger pounds including carry-on luggage. Since this a word problem, the changing dynamic is adding 34 more passengers bringing the seating total to 270 passengers, which imposes a significant change of squeezing the smaller seat pitch like 31" vs  the 236 seat configured economy pitch having maybe a 32" pitch found in economy.  

The greater seat load of 270 is 6,443 pounds more with passengers than the Qantas 236 seat configuration. The 36 additional seat adds weight itself and passenger supplies (food) starts declining airplane efficiency in a hurry. It will increase the weight of a 270 seat configured jet by about an additional 1,000 pounds over-all vs the 236 seat 787-9. If you added additional crew members the over-all weight load for 270 seats could rise about 7,500 pounds over the 236 seat 787-9. The 270 seat configured would take more fuel traveling the same distance, thus more added weight at take-off. The increased weights all summed up would cause a 270 seat aircraft each trip to not make money. No luggage weight has been added in for the 236 seat vs 270 seat model for weight cost which add more fuel weight making the 9,000 mile route.

However, for a nominal seat ticket increase for say one hundred dollars per seat for 9,000 miles, would give the passenger more space for the same hours of travel. This opens up another word problem for all people still calculating. A ticket going 9,000 miles may cost $1,000 dollars on average for each seat and to make it simple. A 270 seat Dream-Liner can offer a $900 average per seat. The 236 seat aircraft will generate $236,000 for its journey. The $900 ticket in cramped space with 270 seats generate $243,000 of revenue for the unhappy customers. Increased fuel cost for the flying heavy immediately erodes the additional $7,000 dollars earned with the stuffed airplane.

The airline stands to make much more money with slight seat price adjustments for the long haul on a 787-9 that Qantas proposes. To make the algebra work the formula could look like this. 270x= $236,000. Solution comes out at about $874 per seat for the same revenue on the 236 seats at $1,000. Once more fuel and passenger support costs are added, it would make such a 9,000 mile configuration not feasible for any Airline.

Boeing Plans The GAP Filler For Its Family Of Aircraft

The Great Air-Plane (GAP) is a much debated proposition by Boeing. They have spent millions dithering around the middle in a huddle, on the CAD, and in the field. They have moved a step closer and giving out hints as a means of expressing its matter of when, not if! The stay at home MOM moves to the GAP status if you parse out Boeing "Quotes". She will be well clothed.

Boeing more 'optimistic' about building mid-market plane - eventually

"I would say we're a little bit more optimistic today than we have been" about the "middle of the market" plane, Randy Tinseth, vice president of marketing at Boeing Commercial Airplanes, said at a briefing on Boeing's market outlook in Brussels, ahead of Boeing's results report on Wednesday.

An end of year Christmas announcement to kick-off 2017 is apropos. The mystery aircraft is shrouded in secrecy of whether it will be dual aisle or single aisle. The second mystery is its range of maybe 4,000 + miles continental leaper. It would be handy going to Hawaii and the Caribbean anywhere from North America with a Rocky Mountain High address. Such an Airplane will move junketeers from Denver to Hawaii without a care in the world of travel. It would also span nations such as China and Australia without eroding the 787 or 737 market space.

Boeing Says Building Mid-Range Jet a Matter of ‘When,’ Not ‘If’

An Atlantic crossing is fashionable with the GAP/MOM Boeing (757?) make-over artist, as its A321-NEO stumbles in the Jetways when the next Great Air-Plane debuts at various concourses in the world of local to everywhere concepts. 

500th Dreamliner By Christmas?

Boeing can reach its 137th Dreamliner by Christmas 2016. A feasible feat as they are projected to deliver about 138 Dreamliners during 2016. So what's the big deal? It means the possibility exist for the 500th Dreamliner will be delivered to Avianca as a present to both the builder and the customer in 2016.

The Boeing 787 frame count is 476 Dreamliners delivered and in currently in customer hands leaving only twenty-four to go before years end. It is a significant 787 bench mark of the 500th customer air frames in service. When considering past programs and complexity, this bench mark is considerable for any maker for any size of newly developed advanced aircraft. 

It may not be Air France counting the 500th Dreamliner body built, but it certainly should be since its in the heart of Airbus country. This little nuance won't be ignored by Boeing's mega competitor, Airbus of France. The 500th scheduled 787 to be delivered on December 20, 2016 goes to Avianca per All Things 787 Blog and my meager math skills.

September 25, 2011 was the date for first delivered 787-8. When considering an end of this year with the 500th delivery, it will have spanned a time of five years and three months on December 25, 2016. The number crunching neophytes may figure 1918 days since first delivery on an auspicious day, September 25, 2011. 

So Yes, the Boeing significance of number 500 looms large for sentimental and program history. It will not change the Boeing financial picture at all, but it will generate immense bragging rights over its 500th wide body entering the market place. It has been no easy feat as engineering mishaps, and production woes stalled portions of this timeline. However, Boeing over compensated for lost time and uncertain solutions for problems it had encountered. 

Boeing built an abundance of 787's in the last several years erasing the memory of any nightmares it had encountered.

This Christmas tip of the hat goes to number 500 and then take the last week of December off while congratulating Air France and Avianca.

   

Boeing Leads: as World's Largest With Aircraft Orders and Builds

Airbus order summary as of September 30, 2016 Below is Airbus Data

Boeing Data Below is slightly ahead of Airbus with Orders as of October 11, 2016

Its Boeing net 432 vs Airbus net 380 orders.

The production summary is as follows for the year

Boeing has delivered 563 aircraft recorded YTD

Airbus has delivered 462 aircraft recorded YTD

It appears Boeing is in the pole position for World's Largest Commercial Aircraft Builder with about 100 days to go for all the Year Ending surprises added to the books per usual.

Perth To Europe and Melbourne To Dallas Threatens 45 787-9's Options with Qantas

The why's (devil) is in the details. Melbourne and Brisbane airports want to be the first home for 787-9's in the Australian flying habitat with having extended routes going to Dallas Texas. Perth wants the honors going to Europe. Qantas has 45 optioned 787-9's as its targeted expansion and can't start filling the order book until the airports get along with one another. 

Qantas wants and needs to replace its aging 747-400's. The 787-9 is the right size however pride comes before the fall when airports are concerned. The solution is with Qantas and where they will base with its first 787-9's in Australia. The answer should be easy but the word pride and advertising is the sticking point. An easy answer is to have three 787-9's show up in Australia on the same day or in the same week. The first airport that actually can launch a flight wins pride award. The Australian government may offer a lottery for the honors of 787-9 acceptance and take this negotiation off the table and have Perth complete the 787-9 implementation plans as scheduled. Otherwise, Qantas may take its ball and go home if the opposing sides can't get along.