The Era Of Airline Expansion Is Drawing Nigh Replacement is The Future

What has Airbus and Boeing wrought? An era is closing before this decade ends. The era of "expansion" in the airline market place. The last ten years has seen the airline industry eagerly purchase wide bodies in great numbers, expanding the business reach not over continents but around the world. 

The advent of the Boeing 787, 777X and the A-350 is going into a pausing purchase phase as airlines are currently seeking renovated air frames from the millennial era of the 2000's. The low oil prices, higher new technology costs, and its filled world routes converge causing a slower demand for those types. Most used aircraft which can fill legacy markets such as European and North America passenger service begins afresh with a certain intensity for renovation.

One case in point is the Emirates condition. Tim Clark, Emirates CEO, ordered a preponderance of A-380's during the last dozen years and it has a substantial wide bodied high tech aircraft yet to be delivered with few route options available. Near term new orders from Emirates will be a one-for one aircraft exchange. For every wide body aircraft retired, a new generation aircraft will replace it as it tries to seek new routes for its inventory. 

Emirates has few options to expand and has relative few older aircraft needing a renovation or retirement. Additionally, Emirates is the Poster Child for the future of market place conditions for most all airlines operating successfully today. Currently Emirates has a massive wide bodied order pending between choosing Airbus or Boeing. The trigger for the order is a higher fuel price status at this time. It is rumored before 2017 closes, Emirates will make a long term order to the delivery cycle with Boeing.

Fig. 1 Emirates Wikipedia reference

As one can observe in the above figure, Emirates has firmly landed into the fleet replacement mode as it still remains to receive 224 wide bodies with too few routes for which to place those already ordered aircraft. Higher fuel prices would cancel any notion of renovating what is in place with fleets having older models and only if the lower fuel prices continue for another three years. 

Emirates is not the type of company for flying older renovated equipment. It will just slow orders and deliveries of its already placed order backlog. Emirates is the "Gold Standard" for Airline expansion.

By 2020 a projected fuel price increase will shake-up the slump of wide body orders across the board as airlines will once again dump inefficient inventory, and then opt for new aircraft replacement and fleet expansion.

On December 11,2012 Winging It said, Watch Ethiopian Airlines For The Money!!!

On December 11,2012 Winging It said, Watch Ethiopian Airlines For The Money!!!

"After reading this old Winging It link on LiftnDrag blog, the article goes on to state watch Ethiopian Airlines, because they are best positioned to take advantage of the 787 on its long legged routes. Little did I know, they would have one 787 catch on fire at London Heathrow, and benched it indefinitely until a resolution is found, or did I know they would increase its profitability by 178%, and recognize the 787 directly affecting the bottom line by so much! Even with its older aircraft inventory in play every day. If it sounds like crowing, then so be it, its crowing a little. I can't help but get a little excited on a long shot Airlines on a winning horse, The 787.

Article Quote: December 11, 2012

" Another look is for Ethiopian Airlines in what the 787 does for its bottom line.  They will be a good case study, since they own such a smaller number of aircraft and fly long routes. The 787 will have an immediate impact from its operations, where you will see how it drives the bottom line at the end of next fiscal year.  This is a manageable study of its business plan and bottom line. You may gain a distinct appreciation for the 787's financial impact on Ethiopian  Airlines."

Today the news announces four years later this snippet.

Ethiopian Airlines Sets Yet another Year of Growth Milestones

“2016 has been an exceptionally challenging year for the African Aviation industry. Commodity exporting countries in general and oil-exporting African countries in particular have been hit hard by the global decline in commodity prices. As a result, demand for air travel has been suppressed and the shortage of foreign exchange has severely affected the financial performance of airlines in the continent. Yet, at Ethiopian, we are very proud of the new heights Ethiopian has flown in the year: we celebrated our 70th anniversary, inaugurated the largest and the finest Aviation Academy in Africa and a state-of-the-art In-flight Catering facility which is the largest in the continent of Africa... ”

The 787-8 Make-over Is Needed

Having Delta eliminate its 787-8 legacy order held over from the Northwest Airlines merger, signals a great need for Boeing to reinvent the model, or just let it tumble into obscurity. It only has about ninety 787-8's remaining to be delivered, even if all of its customers have the resources currently in place for a purchase. The problem still remains that none is ordering the 787-8 except a few customers here and there that have placed an order like Tanzania Airlines last December. At best, the analyst will remark, "Tanzania is in trouble and could cancel orders when the time comes to deliver the 787-8".

• There lies the problem beneath the order numbers. Boeing has reached the back side of its 787-8 order book and it needs rejuvenation of new orders at a steady pace. Therefore, it needs something outstanding coming from the 787 program that is not yet tapped for potential customers.

• Another problem is financial resources spent on a model without knowing whether it will make a difference in the market place. The upgrades need to be transferable to the 787-9 or 787-10. When any upgrade would not interfere with motivations for buying its family of aircraft. The answer for the 787-8 sales quandary is found with several customers and how they use its 787-8's. 

Jetstar and American Airlines have immensely invested in the 787-8's and should be consulted on how it will be moved to further buy the 787-8. Boeing is working on that answer already. Jetstar ordered 11 and it now has 11 in its inventory. American ordered 20 and has received 17 with only three more to go. The key with these exampled customers is they are both a continental based 787-8 customer and knowing what would move to ordering more 787-8's is important.

• Another query is a further investigation coming from the 787-300 data before it was canceled. Boeing had long prepared this statistical data and it knows the market response for the 787-300 when it was still under consideration. 

The 787-800 appears to have painted itself into a corner with a dying interest with its market fit. There are no life lines on the horizon. The 787-8 has become a tap hole going into a new model and technology. This brings me to the last bullet point.

• The time has come to build the tween-er not from a 787-300 platform but from the 787-8 platform. There would be two classes of 787-8's in play having the same body and similar passenger capacity. The passenger capacity would not exceed 240 on the Continental (C Class) and about 250 with a Long Range Class (LR).

Boeing is keen on using what it has already paid for at this time. They could sell five hundred C models spanning one continent limited to 5,000 miles. The upgrades come from cabin enhancements. An eight across 30 row seat map would give the passenger room. Additionally Boeing should sell another two hundred 787-8LR's seating up to, but not ever exceeding 290 passengers. The renewal must vitalize the 787-8 model concept with minimal investment and more importantly not change a “build process” costing billions. The other problem is finding a launch customer buying two variations for its fleet, and that point at this time is what is stopping Boeing. The Orient is an obvious customer region for having a launch customer.

The "Build it and they will come", axiom does not apply in this case. Boeing must reignite market heat offering a 787-8 combination and find a new Middle of the Market A-321-NEO killer at the same time. They must find customers who will launch it!

If Boeing doesn't find customers for the concept enhancements then it will retire the 787-8 by the end of this decade from starved out sales. 

The 787 2016 Before Boeing Numbers Recap

The Pre Boeing 787-2016 Numbers Analysis is a daunting task when not knowing what cards Boeing may hold, since it has not announced anything but the Delta cancellation of 18  Dreamliners during the last month. Those were 787-8's and it hurt the backlog and order book. However, they is plenty of good new on the horizon for the order category. There are several large 787 orders hanging in the market place one of which may come from Emirates and Tim Clark. That announcement should come in the year 2017. There are some additional orders from the Chinese market which have yet to be confirm but are hanging on with MOU's.

The chart below (Fig. 1) main thing is the strong production year of 137 Dreamliners for 2016. Looking at the 694 in backlog illustrates a twofold impact. If a customer orders a Boeing wide body it could receive it before an Airbus placed order. Secondly, Boeing demonstrates a resiliency in the market place outpacing Airbus over the last several years over Airbus. Airbus since the beginning of 2013 has booked only a net of 162 A-350's. Boeing has booked a net 382 of its 787 family of aircraft.

This represent a greater than 2-1 booking pace over Airbus even long after it had announced selling its wide body.  

Fig. 1

Fig. 2, represents net numbers starting in 2012, marking the beginning of the delivery cycle for the 787 aircraft. Noting the order to delivery comparison over this time period shows almost a 1-1 book to bill rate. Five hundred 787's are billed and 427 are booked, returning a .85 book to bill rate. Ideal is a ratio of 1 after the backlog has been established. When first entering the market, the desirable rate should be well above the number 1 as production has not yet started until years later. In Boeing's case the .85 ratio is a measure at full production while having a healthy backlog. Boeing with a few great years could maintain a 1-1 ratio is it takes on another 150 ordered 787's in the next several years. That would be a Boeing sales goal.

Fig. 2

The ninety day moving average is a production efficiency number. Guidance was established in the first quarter of 2016 at 12 per month. The month of January 2016 only delivered seven 787's and it reached 12 a month by March 2016. However, fourth quarter 2016 only delivered 11 a month during this time period. Boeing also exceeded 12 a month pace during the 2nd and 3rd quarters of 2016.

Fig. 3

The Year Over year chart below demonstrates a steady growth of the program with predictable changes in both delivery and order dynamics. The latter being typically inconsistent.

Fig. 4

Fig. 5

Fig. 6

Fig. 7

Mach 1.6 Is Possibly The Sweet Spot

Have you ever wondered about modern fighter jet speed? An assumption by many, "is the faster a fighter jet goes the more dominant it becomes as a fighter". In some cases that may be true but in other cases it may be a useless feature because the battle energy required comes from a slower speed in close quarters.

The F-35 development has startled many observer of having a top speed of only Mach 1.6 which falls below the faster breed of fighter going Mach 1.8 and higher with 2+. The answer may come from battle space efficiency, stealth and performance. What the F-35 gives up from being Mach 1.6 it will add on from being a far more efficient and invisible aircraft. In other words going fast would delimit the F-35's capabilities for which it was designed.

There may be a different assumption in play having the F-22 combined with having a F-35 commonality. The F-22 is the muscle where the F-35 is the brains when flying in formation. A flying formation of two F-22's combined with four F-35, communicates a need for further F-22's on order to complete with intense and purpose of total aerial combat.

The congress is looking to upload another 200 F-22's when money is found. If completed, then the F-35 becomes more deadly than its first take would suggest. It won't need to go Mach 1.8 as the F-22 goes Mach 2.0+ with stealth capabilities. The F-35 computers hook-up with the F-22 systems and sends it into combat with an autonomous pilot at the controls. Both the F-35 and F-22 become a greater force.

I would suggest that is the military thinking of synergism of both systems with each other. The F-35 is in its sweet spot at Mach 1.6 where its stealth makes it stay within its optimal capabilities of design and it can now operate from its most capable position given its multi functions. In other words, the balance between brains and muscle makes the F-35 a formidable and untouchable aircraft. Having the F-22 as its wing man makes the F-35 unreachable. No other nation has this type of one-two punch in its own formations. The F-35 is the screw driver and the F-22 is the hammer.

Thinking About The Grinch Visit At Delta For Christmas

Yes, Delta canceled 18 787-8's from its decade old order from Boeing. Does it hurt? The answer is what this contribution for discussion is about. The pomp and ceremony of a 1200 wide body order book has a smear on it. Delta had no intention long ago of completing this order. It was just a place holder for something in case Airbus could not do with its wide body, an A350. In fact Delta was set up for the Airbus A330-NEO class more than the 787-8. Then Airbus came out with the A350 and successfully moved it to the market.

Long had Delta switched its efforts towards obtaining an Airbus platform. It was as simple as becoming a single operating system company loaded with iPhones instead of having an Android based phones for its operation. Why does Delta prefer Airbus? The simple answer is because the mission and vision of Delta had a subtle change from the top. Some new people came "on board" over the years and joined the clamor of a one fleet world for various and seemingly important reasons. 

Having two fleet types containing both Boeing and Airbus is a theme Delta departed from when inserting its team of new leaders since the year 2005. The leadership analysis demonstrates a startling reveal on the ages of position holders and the respective start date for each in that position. The average age of top leadership is 58.7 years as of today and the average start date of an officer is 2013.

Note: The top tier execs for which almost all are highlighted in yellow averages 53 years of age. The advisory board members average age is 67.

Reuters has provided an Organization listing:  Winging It Analysis Added:

The column with yellow highlights illustrates an age range of 40-60 years suggesting personnel having a new and non -legacy attitude. 

The top of the executive organization has an average age of 53 years. Chairman of the Board is not included with the in-house leadership as that order begins below the Chairman of the Board.

What does all this mean? The new blood has taken the competitive route infusing commonality of inventory for all its aircraft. The one-off example, is the Boeing 737-900 with a total order standing for 120 of its type. This suggests an independent rule is applied for its single aisle segment within its inventory. 

However, Boeing is still vulnerable to Delta's mission and vision going forward. As the 737-900 fleet ages and after that order is completed or cancelled, Delta may opt to go A321-NEO completing its obvious mission/vision one fleet view. The new exec team has chosen to drink the "cool-aid" from the previous boards since 2005 at a time when Northwest's 787-8 order was first placed and as a pre-merger condition for which Delta absorbed.

For all intent and purpose, the 2005 Delta board was hedging its bet when merging with Northwest's 787-8 order and waited until Airbus got its act together on the wide-body segment. The 18-787-8 order merged with Delta was sketchy at best since 2005 pre-merger status with Northwest Airlines. The dropping of Delta's 787-8 order will adjust Boeing's order book by 1.5 percent, and as a further example, the Qatar order for its 787-9's during 2016 has increased the order book by 2.5 % at that moment in time. 

All-in-all there are changes causing a continuous flux from the commercial airplane market. Boeing has had about a half-a dozen years available for addressing the Delta reduction in orders for which it has already done so when booking more orders this year than expected.

Delta Vision/Mission Statement:

"We—Delta's employees, customers, and community partners together form a force for positive local and global change, dedicated to bettering standards of living and the environment where we and our customers live and work."

After analyzing the Delta Mission they missed the corporate version and painted in the employee version as its leading view for the company. It has the heft of a salad shooter.

Slogan:

"Delta Air Lines. We love to fly. And it shows."

Winging It Version: "Delta Air Lines, We love to Fly Airbus and it shows"

Competition Starts With Cement Slabs at Boeing

All the fixtures are bolted down on cement slabs. Fixtures are measured in tons and tons and need a lot of cement on which to sit upon. The 777 factory in Everett has major challenges as the order was given "continue 777-300-ER production while building a 777X and yeah it's in the same place". The problem is not so much a continuous flow from the 777-300-ER and back to the 777X in the same gigantic space, but having divergent technologies colliding on the factory floor.

A plastic wing assembled on a 777X is completely different than an aluminum wing attached to the 777-300ER. These are no small potatoes rolling through the assembly hall. The problem is so complex it will take a team of planners, engineers and mechanics in order to solve the gigantic puzzle. The final solution is years in the making going forward. The 777-300ER will be built for an additional ten years or longer, as the 777X becomes the new standard. In fact the 777-300ER may never be out of favor for some of Boeing's customers, as found with its 767. Freight 767's for FedEx and the KC-46's for the military both having recent orders is proving the modular space flexibility of building different purpose built types on the same line/space as a goal.

The production dance requires a little drop in productivity in the near term. A timely introduction with a new and different type of aircraft (777X) massive assembly is required. This "change" is from using CFRP wings and other components inserted on the 777X and then Boeing flips back to building a 777-300ER all in the same space at the same time. The Boeing dance is mapped out with use of "modular space" and the production floor changes after each milestone is reached for which changes the process flow. 

A definition of modular space: "is a space having an open architecture area flexible enough for installation of new processes and equipment designated for that process. Change within space is complimentary of change within the process occupying that space."  

Here's the plant's team feedback, "Get-er-done"


Example:

In an office building, a company may renovated 3,000 square feet at a time. However, Boeing will make and then close production bays as needed having the heft of 150,000 square per bay. Imagine an area the size of a Super Costco and then one can imagine the temporary space that each stage needs. Each inserting its footprint or closing a production bay as maturity of production process requires. The 777 production is so complicated it must transition towards a bi-production process of building different but similar aircraft each having different technologies all on the same line.

Boeing will leap frog production space as it transitions towards having the 777X model inserted into the Everett facility. Boeing must build every modular space with the capability of supporting immense manufacturing weights. Hence, a six foot thick cement slab is poured into a factory floor in order to take on any task the space may face in the next fifty years. 

Currently Boeing engineers are digging dirt that supported the 747 process back in 1968. A sense of flexibility for change on a massive scale is felt as if Boeing was tasked to move a cement Dam every 50 years while a river changes direction. The 777X impact is that river, and Boeing is digging deep before the year 2020 comes when the ramping up for the 777X process merges with the 777-300ER process. Both model must seamlessly keep the production flow going forward without any conflicting manufacturing impedance.

Boeing is challenging Airbus at the always improving state of mind.

The F-35 Is All About Smoke And Mirrors

Chinese FC-31 #001

The Chinese has released its FC-31, an off-the-shelf Chinese twin engine fighter design.

The F-35 can't haul as much armaments as the FC-31's eight tons of missiles and bombs. It doesn't go as fast as the FC-31. The Gyrfalcon will go Mach 1.8 which is faster than the F-35's Mach 1.6. The FC-31 does though have improved stealth over its recently shown Chinese built J-30. But what is not reveled is the "Smoke and Mirrors Division" (SMD) within the FC-31 capability.

Remember the troubled F-35 program in getting it right with its technologies, and now the program has brought the fusion to fruition. The FC-31 has just rolled out ten years after the F-35 made its debut. The Chinese are at least ten years behind in program development and now having a less sophisticated base version. 

The FC-31 technical muscle does not even compare with the F-22 muscle such as speed, weights and stealth. When looking at the F-35, one can quickly conclude it’s not about having twin engine performance, and payloads but about something more devious. The F-35 is about its SMD, which no one in the world has or has even begun to prove it has that capability. Sensor fusion needs a reliable power plant, and the PW-135 it that power plant driving everything F-35.

The FC-31 (China) has a long history of cheesy jet engines which may fail or cause huge maintenance attentions to keep it flying. If they have advanced its jet engine capability, then it is a baby step going forward and not a quantum leap forward which PW has mastered for the F-35.

The F-35 is not about jet muscle or armaments, as the Chinese and Russians are presenting in its respective models. The F-35 is about sensor fusion for which little is known, including the US armed services in training, whom are now learning about its "hearing and seeing" everything capability. Then it can, in a split second, manage its own capabilities striking from a long way off. Even if an adversary gets a jump on the F-35 with jet muscle, the F-35 becomes very hard to find or fight. The weight hanging on the wings of any adversary makes it a flying pig with a bull’s eye painted on its body.

The Chinese have achieved a certain amount of stealth using its own systems testing its stealthy capabilities, but it does not have a NASA like technology which the F-35 owns. China's primal engine concepts and stolen technology makes for a poor military advantage. The F-35 is built to adjust to an ever changing battle field no matter what is currently available. The FC-31 won't change the F-35 base architecture, but it will only change some of the F-35's flexible configurations using its inherent capabilities against other new or potential adversary when it emerges, such as the Chinese FC-31 newest offering. 

Remember the F-35's SMD has been at work for twenty years to get to this point and it applauds all others for its efforts as it will quietly grin at the others for having superior speed, agility and arms under wings. It becomes a just dial up a solution and fire kind of aircraft destroying all other incoming fighting antics from its potential adversaries.

Quora Asked Whose Better The 787 or A350?

"Boeing 787 is a much better aircraft at the moment. Airbus A350 was a product of a knee jerk reaction. Time will tell which will succeed however. Both the aircraft are still under development."

And goes into a brief summary of some attributes of both aircraft.

How does the new Airbus A350XWB compare to the Boeing 787 Dreamliner?

Apollo 13 Rescued By The F35

Is the F-35 a "moon shot"? Many years ago as a 17 year old I worked on a ranch in Montana with only having a radio to listen of the world. That summer in 1969 there came the Chappaquiddick incident with the Kennedy's and then a successful moon shot. Man finally discovered there was no air on the moon and its gravity was the real deal, when having only a small token of earth's gravity. Those were the golden years of youth. Riding horseback every day and hitching up the draft mules for another run at the hay fields.

Gordon Ranch Montana. Barn where Maude and Ginny the mules lived. Road where the wolf stood.

Man went to the moon, and a politician swam the swamp saying, "it wasn't me". Americans bit the story line and I went swimming on the lake "next door". It was living in a real wilderness with grizzly bears, cougars, and wolves, even though they weren't supposed to be any wolves in Montana in 1969. They were there and I saw one every morning at 6: AM when hitching up the mules just down the trail from the barn.

Now comes the F-35, a Lockheed version of NASA's "Moon Shot". It cost hundreds of billions and it glitches as often as Apollo 13 did in its Journey around the moon during April 1970. The fighter discovers air and gravity are a real threat to its mission. The F-35 will use a vast array of new terminology like "fusion", "stealth" and "fifth Generation". It will become the foremost defense expenditure flying as a "fifth generation fighter" from this date.

Does the US really need the F-35 to only discover no one else can do it? Does fusion make a difference in the battle? Can the invisibility of stealth hide the facts about the program? All these questions will be answered in the next decade. A lot of money is riding on this "Moon shot". What I believe is not important since what facts are more important. If the F-35 makes America forget about Tom Hanks and Apollo 13, then mission is accomplished and the Universe is back in balance.

Tom Hanks script:

"Jim Lovell: [narrating] Our mission was called "a successful failure," in that we returned safely but never made it to the moon. In the following months, it was determined that a damaged coil built inside the oxygen tank sparked during our cryo stir and caused the explosion that crippled the Odyssey. It was a minor defect that occured two years before I was even named the flight's commander. Fred Haise was going back to the moon on Apollo 18, but his mission was cancelled because of budget cuts; he never flew in space again. Nor did Jack Swigert, who left the astronaut corps and was elected to Congress from the state of Colorado. But he died of cancer before he was able to take office. Ken Mattingly orbited the moon as Command Module Pilot of Apollo 16, and flew the Space Shuttle, having never gotten the measles. Gene Kranz retired as Director of Flight Operations just not long ago. And many other members of Mission Control have gone on to other things, but some are still there. As for me, the seven extraordinary days of Apollo 13 were my last in space. I watched other men walk on the Moon, and return safely, all from the confines of Mission Control and our house in Houston. I sometimes catch myself looking up at the Moon, remembering the changes of fortune in our long voyage, thinking of the thousands of people who worked to bring the three of us home. I look up at the moon and wonder, when will we be going back, and who will that be?"