Say It Ain't So, The queen of the sky dies?

The 747-8 days are numbered and is found wanting, for a place in the airshow line. The Airbus A-380 has become a stubborn step-child to the 747-8. It wants so bad to even have a hundred more sales as its backlog dips near 100 units before it will too have to move on. Emirates wants a do-over A-380 for its business case. Boeing is selling twin engine behemoths as Airbus dithers with its A-380 make-over. The 747 program has lost its premier standing with Boeing and it goes to the desert in southwestern US for its retirement.

Boeing is resting its case for the four engine Jumbo Jet. The 777-9X will have to do with seating over 400 passengers. The Airbus A350-1000 can't compete with the  9X's measurables. Airbus may sit on its A-380 laurels too long. Boeing is anxious to move on as it announces it will shift towards the twin engines exclusively. John Leahy from Airbus retires this fall as a job well done for its payroll. 

Airbus, John Leahy and the A-380

Photo credit Leeham News

Now who will take the sarcasm from Winging It? I do admire his biased ad nauseum for Airbus products. He could turn a good argument his way messing with data. His presence will be missed as Boeing's antagonist. 

The world market place will have choices to make when buying aircraft. Boeing has been working during the last 20 years for making a family case. Like any good mentor it has sloughed off a 757, reached for the moon with the 787, and reinvented the 777. No one path was chosen for  its Renaissance. The 737 remake and 777X merging with 787 sensibility only lacks a New Medium Aircraft (NMA 797). 

Boeing is working on that family member with something new, something old, something borrowed and something blue. The enigma for a NMA makes blogging enjoyable. An oval profile is built with the passenger in mind and will it not be a Swiss Army Knife concept that will carry 500 people and 500 tons of freight at the same. It is being built for passenger space, range and efficiency and bulky freight can take a hike via other Boeing aircraft. A gamble indeed as aircraft have been ruling with multi functionality for the last decades. The 797 has one job to make copious amounts of money for Boeing and its customers. Its a family thing.

Paris Airshow, The Calm After The Storm (Updated show numbers**)

The show's business is completed and the CEO's are back on the manufacturing farm. Winging It is taking a stab at making a snapshot list of what just happened with Boeing at the show. A prior article was written using the same charts but some updates were made and a net Book value based on list prices is added.

Direct purchases and MOU's are added in the net column at the stated show value. The "Purchase-Conversion" transactions are netted out as those numbers replace a prior booked value from prior purchases over the course of multiple periods. Even though a working number for the show has been reported between 78 and 73 billion, Winging It has taken a different tack since all deals will be completed in the up-coming months. 

Figure 1. is a recount of what Winging It thinks just happened to the Boeing order book from the Paris Airshow.

Fig. 1 Updated 6-14-2017 with 125 undisclosed Max 8's for $14.1 Billion from the error of 1.4 Billion reported earlier. This updated gross booked total to $104 Billion and the net total $81 Billion. Thanks for your patience for any errors made during the airshow and after.

Fig 2. (click inside a chart for an expanded view.)

The above chart is an example of the "Purchase-Conversion" part of the show. There were 214 of the 737-10 ordered in this manner. Winging It assumes all prior purchases were for the 737-MAX 8 and were converted into the 737-MAX-10's in this case. There were reported about 147 direct 737-10 purchases and those were added to the book at list value for 124 million each, thus making it part of the gross billion number. 

The netted number is factored when Winging It assumes a List price of 112.8 million per 737-Max 8 as already booked before the show, and is now turned into a 124 million per Max-10 booked at the show. The net incremental change uses 214 units, increasing the book by $2.44 billion. 

The total for the gross purchase-conversions of transactions represents about $25.6 Billion dollars for the Max-10, increasing the book by only a net $2.44 billion.

If Boeing did write-up (purchase/MOU) about 150 units directly for the 737-10, then those would add about $18 billion is sales for this type at the show. All-in-all, Boeing netted about $20.5 billion to its books from the 737-Max 10.

Boeing wrote paper for a gross of about $104 Billion with a net book value of about $81 billion. It could be that there were some missed announcements and deals during the show, since it was even crazy for the plane framers to keep track. At the end of it all, waiting for final numbers will come during the first ten days of July from both Airbus and Boeing. Having stated that, Airbus knows it lost and Boeing has a lot of momentum going forward. 

There are several large and hanging Boeing transactions not announced at the show and those deals may be announced at Dubai this fall. Keep on keeping on and the next Airshow should settle the year.

Wondering why Winging It is in variance with press reports is a concern since many report Boeing had 571 units in sales for $79 billion booked. I had reported the list of Airshow transactions as reported and entered it into a chart using list prices and came up with an abundance of dollar value.

After looking at the data the Purchase-conversions were not included in the chart, thus showing 613 units for the charts. The unit number is 42 units higher than the reported show number of 571 units, however the Value total is in line with reported show totals of $79 billion. Refer to Figure 3 below for the adjusted Winging It chart and a closer reported result.

Fig. 3

Is the 42 difference due to 42 CDB units as a mislabeled transaction (help would be nice for correcting the charts)? Somewhere the data is reported differently at the end of the show than what was reported by various sources during the show. We all will have to wait when Boeing issues its reports next month. 

Additionally, the chart records 10 more 737-10's as a direct purchase with 157 when final show numbers report 147. 

Day 4 Paris, Is it a Order Wrap?

On day 4 of the Paris Airshow, the reporting has diluted the purchase classifications concerning purchases, MOU's and Commitments. The Winging It order listing may not even consider the Purchase-conversions of the 737-10 model. But Winging It has been following the airshow news as it occurs and is reported on the day, therefore later analysis shows a disparity from these charts to what others are now reporting.

Below is a day 4 recap for happened to Boeing at the show. It was considered a slow day but at any other airshow day, 125 Max 8's purchased would dominate the headlines. Over-all day 4 produce another 30 737-10's as on-paper orders.

Fig.1 Day 4 Boeing Transactions:

The below Figure 2. depicts a robust expected down year for Boeing's paper order book. A paper order is any firmed purchase, MOU (commitment) or conversion (from one model turning into another). Winging It listed a 97.3 billion paper shuffle for 836 units. 

Not all these units will turn to a firm purchase in the upcoming year(s). It is probable Winging It missed some sales classification where it missed 214 737-10 purchase conversions during the show.  Those 214 purchase-conversions were not always clearly reported and Winging It came up with only 50 737-10 purchase conversions. 

The press finally reported 147 direct 737-10 purchases, thus totaling about 358 737-10's in play for Boeing. That in itself is a good launch and will turn into further net orders going forward.  

Fig 2. Airshow summary to date:

Below in Figure 3, is the firm purchases for the 737-Max 10 as reported during the show. It is inaccurate since there are far more purchase-conversion than stated during the show. It has been reported that there are  214 purchase conversions for the Max 10 from prior Max orders already booked. 

Winging It shows only 50 of those types of transaction. Winging It must of missed 164 of those purchase-conversions and list them as a net purchase for that type. Apologies are offered if confused. Another item in Figure 2 shows 22 commitments for the Max family without assigning the type. This condition assumes a Max 8 when in fact there could be some Max 9 & 10's in that number, thus skewing the Winging it count. However, all-in-all, the 737-10 paper booked about 358-361 units.   

Reports now have been submitted revealing there were 147 firm 737-10 orders. Winging It shows 163 firmed purchases. Somewhere Winging It must of over reported this number by 16 units. This is due to reporting an order earlier when it may have been clarified as a MOU or commitment.

Fig.3 Purchase record as reported at the end of each day. Subject to reclassifying the document class

Figure 4 The Purchase Winging It Purchase-Conversion list for the 737 Max 10

The Boeing 797 Strategic Concept

Boeing has for many a year, in the last decade considered a middle of the market aircraft replacing its long beloved 757-767 aircraft line. The day it stopped building the 757 is the day "strategic planning" arose from Boeing's nomenclature. The strategic airplane would be built as an untouchable from its competitor. Long has the A321 become an Airbus sweet spot for orders. Boeing was too late to the market with a competitive product. Boeing has the 787 X's 3 to build and the 737 Max X's 4, coupled with the 777X X's 2 models in the game plan.

Strategic Points:

• Boeing needed a family of Aircraft First
• Boeing needed a technological quantum leap Second
• Finally, Boeing needed Airbus chasing its program rainbow 

The only thing in the way of Boeing starting its New Medium Aircraft (NMA) is program completion for an unleashing of its combined resources on a NMA program. The 777X is stopping an NMA try for Boeing. Resources have shifted to its 737-10, 777-8X and 777-9X programs. There is residual work to be done  on the Max 8 and Max 9 starting with production capability and its testing regimen. The 777X program starts in earnest next year. All this conflagration at Boeing R&D leaves the NMA program playing a guessing game with its Airbus competitor and Boeing's customers. 

Boeing must contend with strategic inputs for the NMA program such as telling its customers they will build a 220-270 seat aircraft going 5,200 miles. If Boeing's customers are given detailed information then Airbus will get the same detailed Boeing information. It takes five years from forming launch customers, on a clean sheet design, to first delivery. Airbus is certainly talking to prospective Boeing NMA launch customers for any details.

If Boeing lets the cat out of the bag too soon then it will be another 787-A350 dogfight. Boeing can shorten the time to market by developing a NMA on the "QT" for three years before launching/announcing at a "Show". 

NMA strategic plan:

• It needs to line up die hard Boeing customers using sketchy information.
• It needs to develop NMA technology and design from proven accomplishment from prior programs.
• It needs to complete the 737-10, 787-10 and 777X programs before launching the NMA.

Boeing can build a new medium airplane before launching while Airbus watches and looses ground against the clock on a shrewd Boeing move. This is the strategic importance coming from lessons learned both current and prior programs. Announcing early makes expectations wait far too long giving customers angst and the competition time for a rebuttal. 

Boeing needs to go secret with its aspirations while working with customers somewhat like Lockheed's "Skunk-Works". The 787 was announced clear back in 2003 with full details of what it would be made of and then Airbus complained it couldn't be done while forming its own composite A350 aircraft. Boeing came to Market in 2011 and Airbus answered in late 2015. The going-to-market time gap could of decreased with less Boeing fanfare from  2003 to 2011, if Boeing had announced the 787 in the year 2007 after it had completed a successful prototype. Doing so would have put Boeing ahead of Airbus by almost ten years. 

Instead Boeing announced often from 2003, the 787, for drumming up sales for what it proposed down the road thus causing customer angst from waiting and allowing its competitor a response during the interim period of time of announcement to its first delivery, after which Boeing fumbled through new technology and production issues.

The NMA approach seems to take some of those timing issues as Boeing is dodging detection of what it really is going to build while it begins a NMA program currently. 

• It will want a first delivery of its NMA within three years of announcing a launch. 
• The program will be already mature at the announcement time.
• All risks are retired before first assembly is completed except the flying testing.

The whole strategy is to lengthen any competitor response time to what Boeing has already shown to its die hard customers on paper. 

In order to do that, it will have to rely on what it has made before an NMA concept is approved. An all plastic body and wings become a quick solution on the production process. The design is an all new body fitting customers comfort first. The engine selection is based on reliable engine builders. The technology is off the Boeing shelf going forward. No new moon shots. Management plays for time allowing all this going on at the Boeing Skunk Works. Area 797 is activated for testing in Montana for secrecy. 

Just having fun by seeing how much falls into place from this idea and why Boeing stalls on the 797. 

Paris Day Three On The Fly

A settled in day for the Airshow. When all numbers are added and changes made, there will be a comparison with the Airbus order Tally. All numbers in charts are reported as posted by news organisations. 

However, some revision to order count and status will be updated when Boeing and Airbus reports at the beginning of next July month. Day 3 had 9.89 billion paper documents for Boeing aircraft under a purchasing intent. The "various" intents were lumped together on the Max 7 column. This will change once everything sorts out. However, 82 paper documented airplanes were tallied for Boeing's Day 3 count, which is significantly more than the Airbus Tally. 

The paper MOU or intents may turn into real orders by year's end. Airbus posted mostly orders and not many intent aircraft, but it still showed a decline in orders from the last Paris Airshow in 2015. The big item is the 737 Max 10 which will include many order book revisions when changing from a Max 8 order (example) posted earlier and turning it into a Max 10 order at the show. There is a significant revenue increase when a conversion is made going to the Max 10 from a prior ordered 737. 

The units may not change in these cases but dollar value does change significantly so the ultimate net unit book during the airshow will take until the end of month before numbers for Boeing are accurately counted.
  
Fig. 1 Day 3 Subtotal

Fig. 2 Show Total

Yikes, Boeing won the show on paper when it signed for over 624 single aisle in various stages of a deals. The list value is used for the calculation making $90.91 Billion for its paper sales. Look at the 737 Max -10 column for 326 units noting its an airplane not even built or tested. Impressive indeed, as most of the MOU units will turn into booked orders. What further analysis will bear out is how many 737 Max 10's feed from the prior order bookings of early Max units purchase from prior periods before the show. A surprising count is the number of Max -8 airshow orders committed.  The drain from conversions from Max pool going to the 737-Max -10 column is offset by new orders, MOU's and commitments from 297 units collected from the "other" Max columns not called 737Max-10, is a testament for the Boeing Single aisle program, obtaining a significant boost when chasing the Airbus order book. It will not catch the Airbus single aisle backlog at this time, but Boeing has closed a significant gap with Airbus' single aisle order book.

Airshow To date,  Boeing snagged 681 airplane units for all types. Whether all will make it to the Boeing book remains to be seen. It is an impression this is a strong marker to come for future orders in the single aisle area. The 328 737-10's asked for, could double in number by completion of year 3 from its launch at the Paris show, thus making the Boeing gamble a winning bet.

Paris Airshow, By Some Numbers Snapshot

A snapshot is a point in time frozen by some happening. The ever evolving changes at the Paris airshow makes it a moving target. The Winging It aim is often wild. Below is a composed picture of what was known at some time since this morning. A negative number suggests a transfer from a prior period order into a new Airshow order going from one model to another in a purchase announcement. 

Not all data is verified nor could it be accurate since so much is going on throughout the event. Various news sources often report in error as well and researching those articles becomes a difficult task. Exampled by unclear reports of 50 aircraft for 1.25 billion the editor misses the continuity of 50 aircraft going for 1.25 billion. There are errors in the news reporting often leading to confusing data.

Winging It doesn't know who is right and who is wrong with Airshow numbers, so it must wait until the show is done and follow company reports for orders books. Below is such a snapshot without airplane verification which will come later. Anyways, its an attempt to see Boeing's order footprint at the show where the numbers are mostly correct. What is missing are airplane order conversion numbers as prior orders for one model converted to another such as in the Max 737-8 going to a Max 737-10 order. 

This is where the primary problem of reporting accurate numbers for this show. The other problem is a definition of MOU vs Commitment and what does it really mean when considering who is buying what and when.

A "commitment" is probably a letter saying, "if we buy an airplane it will be a Boeing 737-Max-10 sometime. See SpiceJet and Lion Air commitments below for further analysis. They are Boeing customers but are not yet ready to put ink to paper until further notice until Boeing negotiations are complete. A commitment in this case is strong as a MOU. Some commitments could be pie in the sky notoriety at the show. 

An "MOU" is a memorandum which is a legally binding promise stating, "we will buy #nth 737-Max-10 during 2017 at the time final purchase contracts are signed". It's all grey water flowing through the show and bragging about what is going on is just bragging about the muddy drinking water.

A "purchase" is golden and in the books only to be backed out of through exchange of compensation along with the appropriate ensuing lawsuit. See the Qatar purchase as it is the end of a long commitment process after much consideration for its fleet composition, routes and airline purposes in a changing market. The 20 Max 8 started its order completion journey long ago from a commitment status.


I would expect all MOU's to turn into a purchase by year's end and the commitment will dangle until eternity or until the airline makes enough money to buy what it wants or needs. The purchase conclusion is gold in the bank. See the CDB MOU order below. it is a case of many moving parts considering converting from model to another, pricing and opportunity within a limited time frame. CDB MOU has set goals and objectives for completing the "deal" yet to be worked out but it is a go baring a financial meltdown. 

Below is the convoluted and inaccurate chart of the Boeing show from many unreliable news sources for which all claim reliability?

Boeing Aircraft numbers start of day 2

The negative number above represent a conversion from SpiceJet on the Max 8 column coming from converting 20 of the Max 8's into Max 10's. There are other conversions of this nature but not validated at this time. The values from converting have not been factored as of yet.

After all the disclaimers and apologies, Boeing has to date about 377 Boeing frames in purchase play for about 52.21 billion at list prices for which the remainder of the year will whittle down a majority of these MOU's and Commitments in to a purchase. 

Boeing should meet its guidance this year having already netted 208 frames for all types before the show. It has six more months and Dubai to meets its order guidance. A net number would include cancellations and conversions from the announced total announced during the Airshow.

Best Boeing Deal on Day 2 at Paris Airshow

Okay, the biggest deals are not always the most important deal. Okay Airlines from China, bought 15 more Max counting eight of the Max-10's and seven of the Max-8's. A parting shot leaving the Boeing pavilion had a "by-the-way" cause for five 787-9's  committed for future fleet expansion, but that won't count until contracted in full.

The reason it is the best deal today, because this exemplifies the world trade reach at the 2017 show. China showed-up and ordered which makes one ponder if more are to come from China this week as announced deals.

Boeing has employed a new marketing strategy over previous campaigns using the all-hands-on-deck mantra. This strategy is self evident when the Boeing Blog Master, Randy Tenseth goes under ground from writing any Boeing quips for over two months on his Journal found on Boeing.com. It feels like the marketing team efforts has paid off at Paris as Boeing is rolling up a formidable 355 sales and commitments on day one. The second day is already showing a trickle coming forward in an unrelenting pace. It won't match Monday but it will keep this years sales discussion going throughout the show.

Okay, so its day two and fifteen more Max's are unloaded onto the Boeing orders books. An early indication the marketing team is everywhere this year when so many single aisle orders for the Max-10 especially from India. Least we not forget United Airlines who expressed a strong interest in Boeing's latest 737 version could close the show with an announcement ordering 50 or so 737 Max 10's. Just saying, Okay?

Chinese Airline Okay Airways Orders 15 737 MAX Airplanes

So the Boeing Best Deal day 2 is from Okay Airlines from China. Okay!

Best Boeing Deal of The Day at Paris

Ever heard of Monarch Airlines? It acted on no impulse and filled an order for 15 Max 737's. The importance of this deal is not lost on Boeing strategist. This was once an Airbus customer and now it is a Boeing customer primarily ordering the Max for its operations in travel.

ATW quotes:

"UK leisure carrier Monarch Airlines has firmed options on a further 15 Boeing 737 MAX 8s, valued at $1.7 billion at current list prices, and signed a support joint venture with Boeing."

Monarch is transitioning from an Airbus to a Boeing fleet, which should be completed by the end of 2022.

“It is a rare transition to go entirely from one manufacturer to another and we are pleased with how it is moving. We already have NGs operating. We are very happy with our early sight of the aircraft and are in the process of getting them into the air. As a customer, it has been seamless,” Monarch CEO Andrew Swaffield said.

“The decision to exercise our option for an additional 15 737 MAX 8 aircraft is a clear illustration of confidence in Monarch’s future success.”

A rare but important aviation transaction when a customer switches out its fleet to another framer than what it had historically had done. With a prior 30 ordered Max 737's and now the 15 options firmed, Monarch has completed a goal of the initial signing order. Bragging rights here goes to Boeing. Even if no one has heard of "Monarch" its remains a major turn of events in the airplane wars. 

Malaysia Air Seeks A Low Price For A330 NEO's

Even though Malaysia Air has not decided on an Airbus A330 NEO it is reported that price is the sticking point. A break through deal is not depended on price alone but on a delivery schedule as well. Airbus can and is probably dropping its price offering in this case, but it may not be able to deliver on a timely basis for Malaysia Air's expansion and replacement plans. Boeing becomes the lady in waiting in this case.

Let's examine a Boeing chance at this order as it is named in aviation circles as a player for this deal. Leveraging a price is done by Boeing's room presence. Airbus does not want to lose this deal and is in the throes of a production start-up with its A330-NEO. It can and will move to a competitive production mode for this type of aircraft. Any delays would make the 787 an attractive alternative. 

Here is the fleet dichotomy of Malaysia's Fleet in Fig. 1 below: Available through Wikipedia data

A quick review of the fleet makes room for the 787 as it would bump out the A-330 NEO presence if Malaysia starts a fleet change with new aircraft. Boeing is still chasing the deal but has some talking points remaining. 

• Boeing has production slots available
• Higher Fuel prices match future efficiency needs
• Boeing Fleet presence completes Malaysia's commonality of operations from Max-Medium Wide Body. 

The current fleet of A330-300 could be replaced with either the 787-9 or 787-10 thus flipping Malaysia Air towards Boeing. If and only if Malaysia Air sees its fleet expansion moving towards longer than 6,000 mile routes. The 787-10 would slot into fleet renewal of current Malaysia Air's A330-300 (15) and then go further with the 787-9 as a fleet expansion move. 

Boeing would make room for either type in its production queue as it now approaches completing its 787-8 backlog and is well established with its 787-9 output. The 787-10 backlog sits at 149 and some of those orders may seek a further out delivery time than originally requested. It is a belief if Boeing can find production slots compliant with Malaysia Air's plans it may sweep away the Airbus order out from underneath them. Boeing would have to make a price case if it can, as much as Airbus needs, and Airbus is better positioned to do so with its A330 NEO proposal.

September 2017 is the projected deal closing with an Airbus deal by media sources. Boeing's outside shot could be aided by rising fuel prices. If Boeing makes a late genuine offer for placing wide body orders it would have to have other sweeteners such as a 797 offering as a launch customer.

EL AL signs for 16 787 Blunting A Late A350 Order Surge In May

Recently, Airbus booked 20 of its A350-9's from China Southern during May 2017. Now Boeing wraps up an El Al order yesterday for 16 of its 787-9's. Dueling order books before the Paris Airshow is very interesting as it suggests a very active order year in the wide body realm. Wide Bodies are not dead in 2017 as many have written-off.

Many more widebody orders will materialize out of the mist before year's end. Air shows may become more of an announcement speed bump as so many deals are in the works. I will suggest Boeing Market VP Randy Tinseth is so busy he has abandon writing on his "Randy's Journal Blog".  

His last commentary happened last April 7, 2017 (or it came from his staff). A typically timely blog seems to be too much when so much is happening in the airplane market place. 

Expect many steady orders until the end of the year like El Al's recently announced 16 wide body 787-9 and 8's just booked. This has been in the works since 2015. 

Many an observer is witnessing a real ordering dog fight between Airbus and Boeing, especially in the wide body arena. The Airshow venue maybe reserved for the single aisle battle between the NEO and the Max. 

EL AL purchases 16 Boeing Dreamliners !