Boeing is Finding MoM

Below is the mathematical midpoint between the A321-Neo and the 787-8 spotting the Middle of The Market or reverently called MoM. On one side Airbus has crept in an A-321 NEO beating range and seats over the 737-9 while slightly exceeding the seating of the 737-10. The MoM chart below is guiding Boeing towards the 797 model parameters. Logic plays guessing a Boeing sweet spot for a MoM. Halfway between the 787-8 and A-321NEO is the target area. Boeing will most certainly find a protected zone for competitive offerings going years into the future. The 757 is long in the tooth on renovated design features. Airbus would have to go clean sheet answering any Boeing MoM design costing billions for a thousand airplane market potential. On the other hand, Boeing will reach down with its bag of tricks using current engine makers, a 777 wing plant and the 787 suite of technology. It will be dual aisle traveling 5,000 miles and a base of 220 passengers seated.

Fig. 1

A “Winging It” guess is seven across seating with about 30" narrower body compared with the 787-8. This subtle difference maximizes CRFP body manufacturing and weight advantages without increasing over-all airplane costs. Boeing can use its 787 manufacturing infrastructure in place, even though the aircraft body tube is smaller than the 787 model. A decision point becomes, going all plastic or copy the 777X experience having a metal body with CRFP wings and flight surfaces in the tail section? A guess would be it will at least have plastic wings made in Everett, Wa. 

The 747-8 program may close shop by 2024 when a 797 can start-up in its space. The debate at this junction is whether Charleston will have the 797 program in its manufacturing entirety or Everett?  As both are situated for having the ability of changing manufacturing space with some lower economic impact where it usually cost a program many hundreds of million for installation with a new program. The move will go to the best deal. It’s a fifty-fifty proposition for Everett or Charleston at this time.

Another prediction is Everett will win out first building the 797 for its development acumen and initial entry into service resources. Judging on how sales will go for the 777X program, it would certainly involve a Charleston decision if more 777X are sold over the next three years. A busy Everett without the 797 is a busy Charleston with the 797. There are a lot of tipping points for consideration before a 797 announcement, but Boeing at this time has a good idea how all things 797 will fall into place. The talk of the 797 at the San Diego aviation show in early March indicates a commitment on Boeing's behalf that the 797 program outline is complete. It probably has a launch customer at this time unofficially named United Airlines. Boeing would need a half dozen more "United's" before launching.

A core group has already formed but nothing is certain at this time as Boeing would await handshake signatures at this time. A “Winging It” observation breaks down potential regional customers. Two from North America, three from Europe and at least two from the Middle East where some Max orders are converted to 797 orders in apportioned amounts. The prime candidate from any guessing would suggest Ryan Air, Norwegian Air and BA. The North American contingent may stretch Southwest Air wings and having United Airlines as launch customer. In the Middle East comes more surprises and some carrier’s re-examine regional routes where a 797 works extremely well. Emirates is delaying its mega order during 2017. Ethiopian also is positioned to fly all of Africa and the Middle East with a 797. Asia is the hold card in this scenario.

Back to the Southwest comment, it is known as a single aisle only 737 carrier per its business plan. However, nothing should stay the same if an operation is to remain competitive. Southwest cannot open new routes within its own footprint without the 797 proposed capability. Southwest may introduce some pond jumping for its portfolio while keeping the 737 business model in mind maintaining economic fares going anywhere in its network. A 797 would give Southwest synergy with its single aisle 737. Possibilities exist where it never existed before and pairing 737 and 797 routes together leveraging the airline for more passenger and revenue miles. Draw five thousand mile circles around Las Angeles, Chicago, and New York and the 797 looks extremely appealing even to a single aisle carrier going anywhere in the Western Hemisphere and Europe.

Route Pairs for 737 and 797 as the sun sets in the west.

• 737 Seattle to Hawaii
• 737 LA to Hawaii 
• 797 New York to Hawaii
• 797 Chicago to Hawaii
• 797 Hawaii to Australia, New Zealand, Japan, Polynesia (Tahiti) and the whole of the South Pacific region.

The 797 Market is ripe for the picking and airlines are envious of having the 797 in its stables.

The Winging IT Market Cycle of The 787 Wide Bodied Aircraft

·      Market Conception 2004-2011: The market learned about the 787 on January 23, 2003. Boeing announced the 7E7 and the world paused, analyzed and placed orders in great numbers from 2004-2011. At the end of 2011, its widebody order book stood at 752 ordered.

·      Market Experience 2012-2015: The second period starts after first delivery to ANA on September 23, 2011, and ended with 368 additional orders from 2012 while delivering 363 of its 787. All lessons are learned during this period.

·      Market Saturation   2015-2016: The third period is the critical market saturation period where potential widebody routes for this type saturates the playing field, thus squeezing any competition into taking left-over orders remaining. The delivery pace fills the market with 272 delivered 787’s and tapering of orders for another 157 of the 787’s.

·      Market Pause 2017-2018: The market saturation had reached a climax and ordering pace drops only having orders coming from customers who are expanding fleets and not replacing fleets. The first three stages are completed and the ordering binge is over as the 787 matured in operation with its customers who learn of its value through its operations on a daily basis.

·      Market Renewal   2018-~: The last segment starts in 2018 as some fleets already have been flying the 787 for five years and the lower fuel price glut is over. Time to drop old frames flying under low fuel prices and trade-in for new wide-body aircraft. Some 787’s may be traded for newer 787-9’s or expanding fleets with 787-10’s. The used 787 market emerges as a continuous flow as long as the 787 stays relevant.

As in all airplane histories, there is a beginning, middle, and end (BME). The timeline lengthens for the BME’s as aircraft evolution become more effective for its purpose. The Wright Brothers, “Wright Flyer” 1903 (prototype-four flights) until the British WWI Sopwith Camel which demonstrated its expanded evolutionary shelf life from 1917 through 1919.

Starting with Boeing 707, 727 and 737 progressions: (~) signify counting continues

·      707 Built from 1958-1979   Years: 21

·      727 Built from 1963-1984   Years: 21

·      737 Built from 1967 ~        Years: 50~

·      747 Built from 1969 ~        Years: 48~

·      757 Built from 1981-2004   Years: 23...in service for 36 years

·      767 Built from 1982 ~        Years: 35~

·      777 Built from 1995 ~        Years: 22~

·      787 Built from 2011 ~        Years:   6~

From the above listing of Boeing aircraft, there appears a life cycle which suggests as technology and engineers improve aircraft so does the operational life span increase further. The 757 is an anomaly but it was built for a longer period of time than both the Boeing 707 and 727. A Boeing decision was to cease production as the 787-300 was in a concept production schedule at that time. It could have been produced for another fifteen years had the 787-300 never been considered. Currently, a 797 is under consideration which would straddle the gap coming from single-aisle 737 to duo aisle 787.

If Boeing had not designed the 787-300 during the 2004 time frame the 757 would continue its building to date and competing against the A-321 NEO. It most certainly would have been re-engined and had a complete 787 avionics suite added. Using winglets and other advances the 757 would remain an order item for customers until a 797 emerges by 2020. That would make the 757 an almost forty-year build cycle and thus supporting the theory of advancements increase life cycle for every succession of airplane type. 

The only consideration halting this theory is a dramatic market change and an emerging technology that would cancel building a model. The (~) sign is representative of an ongoing duration of a build timeline. The 757 has two other models in production dating from before its own inception into the market, the 737 and the 747. The 747 is reaching an end and will close-off soon and probably with a presidential aircraft as its opus.

The four-engine concept has become a market place “White Elephant”. Even the very efficient A-380 is losing interest faster than Airbus can build it. It too should stop production by 2024, with or without a NEO package hung on it. Airbus doesn’t want to spend more investor money required only to build fifty more A-380s. The 777X masterstroke has caught Airbus flat-footed in a limited widebody market. That observation ties into the current order cycle lull that the mega makers are now experiencing. During 2017 Boeing will have a hard time generating significant mid to larger widebody order. Both the 787 and 777 families of aircraft will dip in orders as has it often done on a periodic basis. Looking back on the 787 programs.

Fig. 1 The historical Order and delivery chart since 2004 -2017 YTD

  

This brings us to the point of what will happen in the widebody order market for 2017. The players are the 787, 777X and 747-8. The 747-8 is a scratch out as it fades gracefully into the horizon. The 777X has had a quiet period for some time and it will burst out 20 Singapore Airline orders with the 777-9X and then save Boeing's 787 widebody order year another of its 19 787-10's before years end. This is already written into a Letter of Commitments from customers. Only the final contract language remains to be completed with signatures included. Boeing should go plus fifty 787 orders in 2017 and then another 25 777 orders during the year. This does not even count on the Emirates order that could be completed at year's end. If it isn't confirmed during 2017, the Emirates status will be most definitely solved in 2018.

One thing holding Emirates back is the aforementioned market place. It is stalled on widebodies at this time. The Market has filled its long-range routes with delivered 787's and the just delivering A-350's. The market is waiting before jumping on new orders until fuel prices rise and old aircraft are retired as the fuel price changes make it more expensive. Cheap fuel has saturated the widebody market as carriers can fly old equipment and make money doing so. The widebody demand has shrunk from this condition alone.

The long-range route exploitation from superior aircraft has limited slots available while the Single-aisle market is in a continuous churning mode for new orders. It takes a huge fleet to operate regional single aisles under 4,000 miles. It takes a continuous replacement regimen keeping businesses fresh within the single-aisle market. Southwest Airline, a Boeing exclusive customer, is an example for this blog. It will need to replace and advance its fleet over the next ten years and beyond in a continuous churning of out with the old, and in with the new. Factor in growth and the Boeing single-aisle order machine will not pause beyond 2017. 

In fact large Boeing single-aisle orders are not yet booked but signed off with LOI's. Boeing will post more orders in its blog before quarters end.

The 2017 order outlook once again becomes more of a mystery than an industry-wide slump. There is some low hanging fruit to be plucked for airline geek pallets. This order fruit may show-up in 2018 so Winging It splits the difference between dismal and ordinary with a few surprises waiting until year's end as always. My unofficial prediction for Boeing is 450 single-aisle ordered and another 150 wide-bodied aircraft of all types making a 600 Boeing order year.

The year 2013 jumps out as the year the 787-10's were offered for sale. However glancing at the year by year tally, it is quick to notice the ebb and flow of the program orders while the deliveries built up to its current high of 137 built 787's in one year.

The analysis becomes a straight line when throwing out the 787-10 orders during 2013. Boeing typically has taken in an order tally from 40-99 after its entry into service. In 2015, Boeing received 99 orders for its 787. This largely due to a new customer ordering up 19 Norwegian air 787's and the unidentified group had 23. Without those two orders, Boeing would have only booked 57 of its aircraft which would put it right in line for the years entry into service in 2011.

This does not even count on the Emirates order that could be completed at year's end. If it isn't confirmed during 2017, the Emirates status will be definitely solved in 2018. In order to reach 150 wide-bodies, Boeing must secure 70 additional widebody orders not yet identified as possibilities.

Boeing's Five Year Look and Plans Expectation

The five year planning and production controls are important factors for determining the long term outlook. Even using a basic build-up model will help determine a direction Boeing will take in its productivity scheduling. For the sake of simplicity the below chart is just a segue into the fine details as to how Boeing may plan its production or how Boeing will perform in the near term of each year’s production goals based on past data.

A build-up becomes complex when using just-in-time strategy for controlling resources for making something big. Boeing only needs parts at a specific time and does not want storage of parts in over abundance. It just wants parts for the next thirty days for this example. Storing too much supplies for building airplanes cost production dollars. The ideal lean production model would seek a just in time parts bin. A build-up planner only uses parts in predetermined optimal availability for building an airplane over the next 30 days.

The ideas in this example looks at 30 days and how many airplanes it may build during this period of time. If it tends to build 42 single aisle in a 30 day period then a build-up chart may call for a two week supply of parts in storage allowing time for parts delivery delays without shortages to the production floor. In this case two weeks represents 21 sets of 737 parts on hand in storage. Everyday a computer tracks the supply inventory and makes an order based on how many 737 sets are on hand. If only 18 sets are on hand it auto orders 3 more sets. Each day this occurs its suppliers can respond in a two week period supplying those complete sets for building aircraft. This is an over simplification example. It gets more complex than this in a hurry.

Below is a chart using five years of past data for formulating how much production resources are needed going forward. Each model is represented whether it’s a prior generation unit or next generation unit. A 737 is a 737. If it’s a NG or Max its counted as a 737 and so forth for all other models. The element identified are as follows:

·      The past five years of orders combined by model

·      Dividing total orders by five years

·      Total of deliveries for five years by model 

·      An average of deliveries made over the same five years.

 Fig. 1

The above Fig. 1 chart is historical data from Boeing's website. Using the 737 column for simplification of its production flows. The five year period is important standard since it is a relevant business time period range. It is very difficult to project a forecast with any degree of accuracy beyond five years. Most customers update its outlook through its annual reporting which would include the next five years of planning. A moving statistical base uses prior years for formulating future years  trends statistically. 

·      A total of 5,349 737's were ordered since January 2011 through December 2016. This is the five year basis for which averages are taken. During this time Boeing Averaged 1,070 single aisle orders a year it is also delivering 539 a year of its 737 during this same period.

·      The orders to delivery ratio for this period is 1.98 or better stated for every two 737's ordered one 737 was delivered. The ideal orders-to-delivery is a 1 to 1 one relationship, thus maintaining a static backlog. The .98 factor suggests increasing production by some calculated build-up amount. The .98 factor is the amount above the one to one ratio goal.

·      In the 747 column the ratio has dipped below one by a negative .52 factor. This suggest Boeing needs to reduce its production output significantly.

Going across the table a picture quickly emerges for Boeing. Increase 737 production and implement leveling the 787 production capacity until additional sales are added. The marketing team has its gauntlet thrown down across the board. It must increase orders during the next five years for all models. Where it is likely the 747 will retire. This year in 2017, a slow order period will strain the backlog and production build-up.

This basic view demonstrates Boeing has its work cut out in the near term within its several market segments. Production decisions rely on pre-set production build-up requirements, otherwise adjustments may occur during the year. Boeing has reduced the 747 to only one frame a month and it may go lower to .5 frames a month.

The 787 program may curb its production capacity from 145 units over the next two years and then could reduce productivity to only about ten 787's a month until sales pick up. The world's largest producer of aircraft will run out of productivity backlog before Airbus does at this time. Boeing is making inroads with Airbus in the single aisle segment. It leads airbus in the wide body segment but an end is in sight for some of its bigger models such as the 747. 

Is The Era of Mega Orders Over?

This is a perplexing question for both mega builder Airbus and Boeing where they both come out and stated it will be a soft sales year. Boeing has stated it can replicate 2016 order numbers during its 2017 campaign. Airbus acknowledged a tough year ahead for maintaining its blistering pace set during the last half dozen years. Typically, Airbus has kept an above 1,000 airplanes ordered for about a half dozen years. It likes to announce massive end of year orders in January of each year for the prior year ending. This year Boeing had a shot and added over two hundred orders at the end of the year, but couldn't catch Airbus as it held out with its last minutes orders reported.

The year to date ending in February 2017 has Boeing with 58 net orders and Airbus with -8 net orders after sixty days.

2017 has started slow as Boeing has a nominal lead over Airbus, which can quickly evaporate in one Airbus reported deal. However, it also means the prediction of a slower order year is probably a reality from its own analysis. If Boeing can hold serve by replicating last year’s numbers and Airbus finally has padded its backlog too far, customers can wait before placing another order with it. 

A Competitive travel market keeps the mega manufactures in balance of each other. The airline who can renew or expand fleets the fastest will best its competitors. Those customers are always seeking timely deliveries from the builder. The plates are spinning in the air. A builder needs orders and another builder needs production and its customers need airplanes just-in-time. 

The 2017 summary awaits the airshow announcements and December surprises before correctly analyzing who is right on the question of the era of the mega order being over.

F-35 Procurement Score Card

Long has the F-35 been coming to the forefront. The US government has waited to see the white of Lockheed eyes before moving forward with a robust allotment of F-35 block buys. It needed milestones, political will, and good news before the onslaught of block buys for the F-35 program could head-up its steam. Sometimes Lockheed would build the F-35 on its dime and then milk the US Government with installment payments before a Block buy was completed. When a block buy was approved like Low Rate Initial Production 9 (LRIP 9) much of the work was already an item on Lockheed's production floor, thus avoiding expensive restarts of the production when funding had yet not been approved.

Fig. 1   F-35 Block Buys in Units and types

A second strategy evolved having a massive block buy effort for saving cost on the program when using an old school thinking of... “economy of scale’. The more ordered, the price drops as Lockheed can now expand its production and buy parts and assemblies in mass quantity.  Lockheed could rely on its suppliers to drop supply prices for services rendered in a large scale.

Analysis of the table above in Figure 1 represents a recent signing of Lot 10 for 90 F-35's for Low Rate Initial Production (LRIP). When will that end and go to Full Rate Production (FRP)? It is hard to say however, lot 10-14 has been classified as a LRIP status for the time being. Lockheed is building production space over the next two years. The testing phase awaits 3F and 4F coding validation before allowing Lockheed a ramp up the F-35 program to FRP. The block 12-14 contract anticipates Lockheed moving forward. 

Breaking down the numbers and time is a guess and here is my best guess. Lot 10 building starts in 2017 going forward to sometime in 2018. Lot 11 is not yet a signed contract as it should take a greater part of 2017 to sign it. Lots 12-14 is the granddaddy of all contracts to date. This is the real costs reduction negotiation where President Trump will involve himself during this period. It is different because it is not a lot-by-lot contract process, but an all-in-one for the three lots having a fixed price of about 85 million per aircraft cost (without engines), I would think. It is a contracting for 410 units of the F-35 through this three lots buying strategy for the US military and its partnered nations around the world.

The time line for all this production becomes a mystery but an educated guess based on blocks buys that tend to follow a rule of a year's production equals one lot. Using that as a thumbnail sketch Lot 10 should be completed during 2018 and then Lot 11 and so forth. Listed above is five lots thus five years of production with concurrent testing using software 3F and 4F.  By the end of the fifth year there should be 629 of the F-35’s delivered to the US and its partnered nations starting from lot 10 going forward. By 2022 the US could have about 600 F-35's in its service. Some of which remain as testing aircraft but a great majority combat ready fighters. 

It will have taken from 2011 to 2022 to get to a point where the F-35 will have taken its right full place as a feared fighter. By then the pilots are still discovering new ways of using the F-35 capabilities as pilots learning becomes a works in progress during the next 40-50 years.

Boeing Must Formulate The 797 As An Added Value For Its Famliy of Aircraft Before Announcing.

"Udvar-Hazy isn't convinced that Boeing has figured out the magic blend of price, performance and production costs that will make the 797 a best-seller".

He has something in mind but doubts Boeing's resolve for such a project. However, United Airlines begs to differ as it smugly acknowledges Boeing's sales pitch honed in San Diego recently. 

"What we've seen so far is very, very interesting to us," Andrew Levy, United's chief financial officer, said in an interview. "We certainly hope Boeing launches the airplane. We think there is a need for it."

Two leasing companies and one major later there is talk for which makes Airbus anxious as it has more production dragons to slay in the mean time. Boeing is looking for a three customers announcement for the 797. It will go deep into the 787 play book when forming this aircraft. It will only offer a 797 if it can drain the Boeing money pit it built up from the 787 program by using the bag of tricks Udvar Hazy was looking for in his statement.

Udvar-Hazey is crafty purveyor of aircraft and when he sees a gold nugget on the ground he will fail to mention its existence while United airline is an over anxious prospector liking the assay report beyond expectations. There are others who could use this version of a 797 and many are the ones who make a living over the Atlantic. Could this be the Ryan Air Silver bullet , or the Norwegian Air Saturday Night Special? Winging It thinks so and Boeing has a grasp of what its customer will do in this case. Udvar-Hazey is a middle man of leasing and his customers are full of wide bodies ordered. Boeing would need to make a business case directly to Udvar-Hazey's customers before he will show his hand in favor of a Boeing concept. When the announcement shoe drops for the 797 there will be a robust list of customers sweeping in for this latest gold rush of airplane purchasing.

The A321-NEO taught Boeing a severe lesson on airplane gamesmanship. Boeing was stalled over the 787 program by billions spent.  Airbus stuck it to Boeing with its largest single aisle making so many orders. Boeing has not recovered since that NEO play. It is looking for redemption in the market place and the 797 could be that counter as the 787-8 or 737 Max family doesn't slam the A321 NEO out its airspace. The market place is rapidly moving towards the Middle of The Market (MOM) without even Boeing sitting at the MOM table. A Boeing MOM would put Airbus in a bind as it wrestles for market dominance in the Wide Bodied realm. The A-380 is a sunk cost and a lost leader. The A-350 family failed to over-take the 787 family of aircraft. In fact there is little room remaining in this market since an Airbus passing lane has merged into the main traffic lane.

Boeing, after-all, will pull the MOM trigger under its airshow smirk in 2017. It is competing in a market place dog fight with Airbus. Out of spite it will announce this A321 NEO beater, and Boeing has already the customers who will support this offering. China, an emerging market, and is geographically situated for a five thousand mile duo aisle circle. The 787-300 was dropped because Boeing did not have a Chinese foot print at that time. Another decade later, China needs a higher density requirement where a single aisle is not well suited. Now there are at least three more 797 customers in the mix coming from China. People like the "Scoot" people need a MOM for its region flying in a 5,000 mile circle from Singapore. 

Without even going to the Middle Eastern airline giants, a keen market for the region's Euro-traveler has a definite use for a 797 MOM. India to Paris is within its range as an example. Then Haikou (Hainan) to Sydney Australia is also under 5,000 miles. A picture is unfolding for the airlines in a quest for a MOM having 240 seats going 5,000 miles while fitting in every terminal gate.

The driver stopping Boeing at this time is the list price or deal price for such an aircraft. Boeing knows the production and R & D costs of this paper example and it thinks it has it dialed-in costing to within several million per copy. If and only if Boeing can find five hundred orders in the initial market, it will be go time. This will be no moon shot as Udvar-Hazey fears. It will be a high flying off the rack melding of everything already spent building The Max, 787, and the 777X. The work is already set in Boeing's concrete and it’s a matter of airplane execution at this point. In less than six more months something greater will be said other than the United quote of "looking very interesting". 

Winging It Has A World Footprint

“Winging It”, has been provided data by Google Blogging internal statistics. Below is a worldwide footprint of where its readers come and from what part of our world. The remaining nations not ranked represents about 30 countries below.

Below is the very first Winging It Blog Posting 1,611 days ago. This also marks the 1,060th Winging It Post in 4.5 years!

Wednesday, October 17, 2012

British Airways Announce Start Of First 787 Construction

All things 787: Boeing gets a break in the weather, send up 3 787s for flight tests Announcement OF BA 787 Start Of Construction

The World's Biggest Builder, Airbus or Boeing?

The information may mark a plummeting of orders taken for the mega aircraft builders during 2017. However, it should not mark a declining production pace for the current year 2017. These numerical relationships will lead to conclusions about the long term health’s of the two manufacturers in the world market place. The place to start on this endeavor is the definitions about the charts below

• Backlog: The number of Units on order but not delivered since beginning.

• Year To Date: Current point in time of year summing totals occurring since first of same year.

• Book: Airplanes Ordered YTD

• Bill: Airplanes delivered for money is billed and received YTD

• Book to Bill Ratio (BB): For airplanes ordered are divided by airplanes delivered, in units and value. The constant pace objective is for a 1/1 ratio. Any BB rate under “1” suggest a shrinking backlog. Any book to bill rate above “1” indicates a growing backlog.

• List Price: The catalog price without any deductions applied from its transaction agreements. Usually the actual sale price is about 40% to 50% under its respective list price. However, the charts below only assumes the published list price valuations by the manufacturer for every aircraft ordered or delivered.

Fig.1 Summary Report Please read guide below Fig. 9 charts for explanations.

Fig 2. Boeing Single Aisle Orders

Fig. 3 Wide Body Orders Reported

Fig. 4 Boeing Single Aisle Delivered as reported

Fig. 5 Boeing Wide Bodies Delivered as reported

Fig. 6 Airbus Single Aisle Orders

Fig. 7 Airbus Wide Body Orders

Fig. 8 Airbus Single Aisle Delivered

Fig. 9  Airbus Wide Body Delivered

Disclaimer and qualification about the data:

Boeing has the lead as the World’s Largest Airplane producer at this point in time during 2017. Investors may want to examine this “as is” data and a general guide. The manufacturing performance and future potential requires a more exacting analysis. A more critical and detailed accounting can be obtained from the respective company’s financial records having complimentary annotations containing exceptions and notations for every of its account status. Therefore, this summary is not intended for financial investment advice nor is it intended as a guidance for any future stock investment. It is only intended as a general snapshot of comparative data with its historical backlog and current year to date information provided by each manufacturer’s websites.  

What is Known:

As a starting point for this year’s charts, the backlog on January 1, 2017 is the beginning number using all aircraft orders and deliveries from its beginning. Boeing Backlog is 5,695 units and Airbus Backlog is 6,836 units. It is important to understand that during the prior years, each manufacturer has written-off some unfilled orders as programs expire or the models are no longer required due to advances and replacement models such as the original 737 is replaced by the 737 Max and some orders in time maybe written-off containing models no longer available.

The backlog can be adjusted at the start of each year as more information becomes available while adjusting the year end reporting and recognizing changes from closing accounting entries.

The start of this year’s backlog is derived from both Airbus and Boeing data available on its respective websites. The number uses list prices and model types of undelivered units for this basis. The YTD information adds or subtracts from this base number establish at the beginning of the year. In this case the beginning of 2017.

Boeing has had a middling first two month when reaching production expectation and orders placed where Airbus has a dismal start for 2017. The orders and delivery number for 2017 through period 2 are available with this report. One big month of orders by Airbus could catch Boeing and it likely Airbus will have a few surprises by year's end, as it usually likes to report mega orders through any December 31, ** ending. Boeing pulled an Airbus routine during 2016 by announcing a large quantity of last minute orders as if spying the competition is alive and well. It is important to Airbus to always go big over anything else on the planet, like a spoiled child wanting its Ice Cream.

It must frustrate the Airbus YTD people as it shot its order wad at the end of 2016. Both manufacturers will have a "same production different year" experience, but Airbus drained its swamp at year's end before 2017. However, Boeing is plodding along its merry way having multiple orders in waiting and some unfinished business yet to reveal itself after the first two months of 2017. Expect an Airbus order revival by quarters end.

The third period data will be interesting for both framers. The BB ratio starts to take form by that time and onlookers will start to predict BB information as financial pablum for investor's. Winging It has no predictive input at this time. This is a spectator sport having a Vegas slot machine running 24/7 in the background. However, dice will be rolled just as lemmings jump into the ocean once in a while.

Backlog and what it may mean to the Framers: 

Backlog is the wick length on the lantern. Resources are the supply chain, manufacturing capacities and capable personnel pooling up as oil for the lantern. The flame size is the delivery capability. Airbus has more wick for its oil than Boeing has for its flame. Airbus cannot turn up the flame inspite of wick length where Boeing has turn up its flame consuming more wick and oil making it the world's largest aircraft maker at this time. If Boeing is to sustain the flame it must have more oil and wick where Airbus needs more oil and flame before its wick becomes too long to burn efficiently. This is the picture of these charts. Its a balancing act and requires constant attention. The relative numbers provided suggests, where adjustments must be made for the strongest long burning flame possible.

The Pre Announcement 797 To Do List Summarized

What must happen before the 797 becomes real to the market:

ü No show stoppers from R&D

ü No new technology not already in service

Ø New Wing designs

v New engine awarded with yet to be determined leading engine maker. Rolls, PW or CFM or a combination using GE.

v Pre Announcement commitments in-hand greater than two hundred aircraft.

v Major Airline as Launch Customer

Ø Comprehensive review of program costs expectations

v A Defined break-even point for aircraft delivered

ü A defined range capability true class type and not a another endless model line coming from the 737 and the 787 family.

Key:

ü Completed

v Unknown

Ø Works in Progress

Is A Boeing 797 The New MOM ??

The news is broken from comments made during a recent air exposition in San Diego, California this week. Boeing is looking at a new twin aisle having the 797 moniker. "Winging It" has written often about such an aircraft and it can be searched using key words such as MOM. 

Little will be discussed on this blog at this time until Boeing makes the announcement. It can only say that the "Paris Air Show" (Le Bourget) during June 2017 is the perfect venue for such an announcement. Like most predictions, it becomes a gut instinct from all the news postings in total which could lead someone to conclude it will be soon enough and why not Paris? 

Recent Winging IT Links on The Blog: 

MOM is coming, Winging It Weighs in Again

A Plausible Argument For MOM Exist

Last Word On MOM until late 2016 Announcement

The sketch below is a shortened view as the actual concept would go 30 plus rows.