Dubai and The Tip Of The Wing

So far the airshow is like an Iceberg. Ninety percent is underwater and only the tip is exposed. Egypt Air is in talks with with Boeing for a half dozen 787 before the show opening and Emirates is trying to squeeze Airbus out of some of its old A-380 ideas.

Boeing has a folding wing tip coming into the show which could make things miserable for Airbus' chance of more A-380 sales. Its been noticed by Winging It that as often as Airbus talks about A-380 prospects, it mentions how easily the A-380 is even fitting into regional airports?  Of course that reference could mean a desert airport with copious amounts of sand at the end of the runway. The only jet in the sight of view is the A-380 unloading at some glassed over building having bus service going to the next oasis near-by.

Tongue and cheek humor is the attempt at parking the A-380 in a regional airport and Airbus should know better than quoting how it fits-in everywhere! That is why Airbus is selling about two a year to its airline customers and it hopes for another fifty coming from Emirates at the November airshow. 

Source: Getty

Behind the scenes is not a spectator sport and Boeing is digging sand as fast as it sloughs back in during a sand storm. The expectation is some big announcement surprising the aviation world. Boeing hopes for a long delayed big order from Emirates, those same guys are in talks with Airbus for a new updated A-380 order. 

If Boeing were to win the day at Dubai, Emirates would have to change its business strategy away from the A-380 towards the 777X. However, a small observation shows it ordered 142 of the A-380 with 42 remaining on back order and it also has ordered 150 of the 777X from the last show in 2013. The big elephant in the room is the 777X and not the A-380 since it has already received 100 of the A-380.

So there should not have any additional 777X orders at this year's show. The only outlying is the 787-9 or  787-10. It could fill a Emirates fleet completeness with fifty ordered in a combination of the 787's. Its only speculation at this point and no rumor is floating on that matter. 

The show remains a mystery for orders where Boeing should pick up a sampling of wide body orders rather than having a domination of orders coming from one or two customers. The dark horse is the 737 Max family where a surprising number of the single aisle orders could come in as it is overdue for some more middle eastern love.

The concluding opinion, Dubai is an airshow and not a swap meet. The tradition of order announcements remain a mystery. The expectation of a large order announcement is confined to the life and death throws of the A-380. The show's crowing maybe moved out with an after show deal making spree until year's end since pre show talks are taking so long. 

The show is being used as leverage for making a best deal with a desperate Airbus next week. Boeing is moving behind the scenes hoping it can stay out of the sand trap. Boeing's 787 production is going to 14 a month signaling multiple deals are in the balance. 

Dubai could be a big reveal for why Boeing committed to 14 a month 787 production guidance last summer setting-up next year's output. 

Airline Reporter Dials UP The 777X

Airline Reporter is a read for those who know little about the Boeing program on its upcoming 777X family of aircraft. In brief, this primer obtained through the link above will inform about what the 777X will do. "It's the wing", making this a breakthrough aircraft.

Airline Reporter/Boeing Sketch.

Is The A-380 Too Big To Sell?

The A-380 idea is about 20 years old and has been flying for about twelve years. It used "The Field of Dreams" play book.  A delusion of grandeur unfolded for Airbus promising a break-even point at about four hundred copies in the first half dozen years. However, that day had to rely on some accounting trickery to get out of that promised mess. The airplane has yet to sell even three hundred of its type.

New sales for the A-380 transactions are more symbolic of a buy one get second one free campaign each year. One A-380 order in a year is a big deal. In 2005 it first flew. By 2020 the 777X will fly going farther for less money. In fact today's wide body aircraft can fly two different routes at the same time hauling more people in those different directions than a one direction A-380 behemoth. The 777X will put the A-380 to bed as it ages out of service in the next ten years.

The passenger fantasy for double decked luxuriant travel which is usually reserved for cruise ships does not apply to air travel. Even with 18 hour fights, showers become pointless as there are no balls to dance with even on an A-380. Or does vast amounts of foods exists as found on cruise ships. The travel idea is getting there for the play and not for playing while getting there. The Airbus concept was for each passenger having an exquisite travel experience among five hundred close strangers.

The 777X seeks to find a flexibility for travel rather than only having several dozen ports of call the A-380 has and it will go everywhere having hundreds of cities and countries to visit. Emirates has a definitive business plan for its A-380's but the world will not change fast enough to land its vast fleet of A-380's. The 777X will make airline money in chunks rather than in lumps as the A-380 proposes to do. The 777X must entertain its passengers up to 18 hrs where the A-380 must do the same. In order for the A-380 to do that it must slim down seat numbers while burning fuel on four older engine types.

The A-380 is rapidly becoming a profit boat anchor as it ages. Emirates will order more but after closer examination, that number  may drop from 50 newly ordered to only 20 reordered. The lower realization is for replacement models for its older (or first delivered) A-380's. The fleet expansion will come after the 777X models arrive and not for the A-380's reordered.

Reputation: The Sixth Plate Spinning For Boeing

The reputation element is the corrosive element which can tumble all the plates of an airplane manufacturer has in its arsenal of spinning plates. The metaphoric vision of a entertainer standing on stage has mastered a plate on one pole balanced only because it is spinning. The balance is much like riding a bicycle where the rider takes for granted they will not fall as long there is motion forward with its spinning wheels. The airplane builder also is riding a bicycle or spinning a plate for balance. In fact the airplane maker is spinning up to 6 plates at once for an encore which is more difficult by far than riding a bicycle.

The plates could be labeled with these sub groupings:

• Reputation
• Customer
• Innovation
• Performance
• Reliability
• Results

This list is not  complete but does represent key ingredients found in a successful airplane making business. All the things Boeing, may fall under its various headings. A pyramid could be built with these headings making "Reputation" the key stone at the top of the pyramid. While envisioning a new model like the 787, an observer can interrelate each item listed as a spinning plate. All plates must have an occasional twerk of the pole revving up its spin so it won't fall. A fall of one plate not only brings it down but brings down Reputation every time. Hence, Reputation is the top plate in the stack.

The interrelation of the stack can follow a path through the plates in a logical sequence. Reputation is built by its Customers confidence. Innovation is made for its Customer's sensibility while Performance indirectly serves its Customers and Reliability builds Customer dependency on the plate resulting in an airplane maker's Reputation. The stack of spinning plates receives the applause gained from Results.

Digging further, the R words are goals words. The "C.I.P." words modify the "R" words. A "Customer validates the airlines Reputation. If an airplane falls apart in flight from the way it is built, the airplane reputation fell from the stack and takes everything down becoming an unfortunate "done" deal. The customer refuses to fly on a faulty airplane, innovations didn't work and reliability is out the "Constellation's window" everything else in the pyramid doesn't matter once a reputation plate spins off the stick.

" Lockheed built a total of 856 Constellations (331 of these were for the military). An inordinate number were used to smuggle arms, aliens and drugs. More than one Connie has been anchored to the ground and used as a restaurant or cocktail lounge. General Dwight Eisenhower used a C-121A military variant as his personal craft, named "Columbine" and another after he became President, named "Columbine II". General Douglas MacArthur named his Connie the "Bataan". Connies were used extensively for spraying. They were used for secret snooping, with at least one being shot down by hostile gunfire. Constellations were used to carry thousands of tons of food to starving nations.

    

In the end, the Connie was brought down by the fast developing technology of the jet engine, and in particular the Boeing Model 707 jet airliner."

Innovation sneaks in at the end with the jet engine.

Back to Boeing's 6th plate, the 787 had early developmental mishaps with its battery, improperly assembled aircraft needing shims, and instances of fires during testing. The first thing includes  commercial operation. A hull loss would have ended this program by 2012. By 2017, Boeing has achieved over 600 787 deliveries and its orders appear to pop up every month during 2017. A hull loss is a show stopper for any maker or airline business. The 777 family lost two hulls during the last several years from military shoot down and a mysterious disappearance during its flight. Since no cause of loss have been attributed to the airplane maker, the 777 reputation remains intact. In fact one 777 crashed at at the end of San Francisco's airport with some loss of life while the remaining passengers could walk away from its tumbling during its crashing. The 777 was heralded as complete aircraft worthy of withstanding a crash of this type.

Boeing's reputation is selling its wide bodies during 2017. The innovation and results of the aircraft has built customer confidence enough that Boeing no longer has to spend resources on its reputation. It only has to keep executing in programs by keeping them on the rails without mishap. The performance is directed at the airline customer itself and the passenger indirectly where its reliability becomes a factor for sales and building successful business models for the any airline customers. 

Boeing 787 Numbers Happy Halloween (updated)

Tis the season for Boeing Candy and here are the Monthly 787 Production charts  10/31/2017.

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The 767 Resurrection

Leeham News seemed to have revealed a slip of the press notes when it said market Intel reports about deal is in the making for a huge 767 order of 50-60 for this old wide body.

"The company is in discussions for 50-60 aircraft, market intelligence indicates.

Boeing declined comment, saying it does not discuss conversations with customers."

Boeing Quips:

"We continue to feel very strong about the 767 production line. As you note, we just recently stepped up to 2.5 a month on that production line. ... The fact that we have a combined line that can serve the needs of our commercial and military customers is a unique strength of that line."

-- Muilenberg

The question remains can Boeing deliver for what a customer intends for its delivery pace?

There are many more questions in front of this idea needing answers but it may come before year's end in some sort of order gasp on Boeing's 2017 onslaught towards a banner year.

• Can Boeing Deliver it like it is a 787 in production?
• How low is a price low enough before an answer ends with sold?
• Who is talking to Boeing in the back rooms about the 767?
• What part of the world would a deal like this benefit, South America, Africa or China?
• How Many Airline companies does China have?
• How much cheaper is a 767 vs the A330?

The list price of a 767 300ER is $197 million where a 50% mark-down is $98 million.

The list price of an A-330-300 is $259 million where a 50% mark-down is $129 million.

There is a remark by an SA aviation analyst the price could be $70 million for each 767 in question.

Another Look At Boeing's Third Quarter Backlog

A formal new feature was almost forgotten. Bellow is the third quarter 2017 Boeing backlog in units and total dollar value. 

Thoughts "Qantas almost certainly won't order all 45 Boeing 787s" (ABT)

The Australian Business Traveler wrote about how Qantas may not pick up all its 45 787-9 options into the future. Qantas has changed since those heady days when when it was a Boeing order star in 2005. That was during the early introduction of the 787 program. Since then, things have changed. Qantas has become a stalwart bell-weather of airline control by its leader Alan Joyce.

The conservative approach has muffled high aspirations of its world dominance theme from Australia. Qantas had to make adjustments for getting its financial books in order before anything was changed. The existing fleet had to last until a corporate turn-around was achieved.

Qantas' conservative approach has done just that and it just has received  its first 787-9 from an option pool turned firm order of eight aircraft. Its option book only has 45 more aircraft it could turn into deliveries at a set price when buying aircraft and extras. The Australian Business Traveler says it may not happen. 

Winging It happens to agree with the article from a different perspective or from a different emphasis mentioned in the article. The standing option is just a starting point for this company twelve years later. A lot has changed since the initial deal with Boeing. Qantas flooded its off-shoot, Jet Star, with a fleet of 787-8's. It was a work-around for a beleaguered Qantas at the time. The Jet Star fleet performed as advertised and Qantas took note of the success. Jet Star's mission was not to step on the Qantas toes or try to become a world beater.

As mentioned before much has changed since those days. The 747 is no longer "needed", its retired. The world's aviation playing field has evolved. Many airlines now crisscross the skies Qantas had envision it would fill a dozen years ago. Australian travel requirements have also changed. New routes are coming into play from continent to continent that are specific to Australia and its paired continent.  

New aircraft development is on the horizon from its main aircraft provider, Boeing. The 797 is a NMA coming to the fore front and Australia is just the right size for a NMA. New Zealand and Indonesia is "next door". An NMA is made for an Australian domain going about 5,500 miles. The Australian Business Traveler is correct noticing Qantas would not take all 45 787-9's from an option position. The 787 option is a Qantas pile of poker chips needed for doing future deals in a changing market.

Qantas is the long haul provider and Jet Star would be a 797 candidate. Qantas will not need 45 787-9's unless world conditions change and competing airlines from China or the middle east slow down its purchase of 787's.

The poker chips can be parlayed into a mix order including 797's 787-9's and 787-10's. It can also rise in number of orders from 45 depending on the over arching objectives Qantas will have from mixing up its fleet. This is where a Winging It opinion works into this story.

Qantas/Jet Star may turn its 45 787-9 options into a 60 orders for a mix of 20 Jet Star 797's, 20 Qantas 787-9's and 20 Qantas 787-10's. Qantas will keep stacking its poker chips from its profits until Boeing announces the 797 program. The 787-9 and 787-10 programs aren't going anywhere soon so Qantas can wait for the 797 to be announced with Qantas being part of that fun in behalf of Jet Star.

The seat count of 250, 300 and 330 for each respective model and the ranges established would make Qantas a head to head competitor with SIA in the South East Asia quadrant. The capable ranges for each type mentioned of 5,500 (797), 9,500 (-9), and 6,500 (-10) miles respectively covers both Jet Star's and Qantas' needs. The source for fleet aligning comes from its old 787 options (45) still remaining around in the Qantas order books. In ten years this mix could evolve as all airline fleets need to evolve as it is capable of doing and Qantas has become a very capable airline.

Backlog A Chink In The Airbus Armour

Its been stated the sweet spot for a maker of popular air frames is for the one who can deliver within a airlines planning and expansion needs. It is therefore important not to make a customer wait more than five years for financial planning purposes. The outer limit for purchase risk is usually about five years. The backlog pole position becomes important to any major framer of popular airplane models.



A quick formula would be taking backlog and dividing by the optimal production pace per year. The Airbus guidance is 120 A-350's a year by 2018. Boeing will make 14 787 a month by 2018 or 168 units for the year. Using these expected productivity pacing of 10 and 14 units per month respectively, an expectation can be made how far out is the back log.

Airbus' 744 unit A-350 backlog with 120 units a year delivery pace  suggest a back log for newly placed orders at 6.2 years before its order book delivers a newly placed order.

Boeing's 683 unit 787 backlog with with a 168 unit delivery pace projected for 2018, only has a 4.0 year backlog which is easily within an airlines five year plan if it placed an order today. 

However, the backlog production position is a fluid and dynamic placement. There are airlines who delay or cancel an order. The backlog position may shift monthly opening up a build position sooner for  those needing a delivery quickly. That too becomes a separate airline risk of when it could expect a delivery if it finds itself at the back of the order line, and it needs its aircraft closer to front of the line.

The Airbus 6.2 year backlog as compared with the Boeing 4.0 year backlog gives Boeing more flexibility for giving its new orders a closer look at timely deliveries for its airline customer. Receiving an airplane after 6.2 years from an order date implies a greater risk is taken by an airline when it awaits its order for a longer period of time.

The chart below provides a glimpse of a customer's relative position if it ordered today it could expect more flexibility when buying the 787 respective to the A-350. This is a big incentive to order Boeing's 787.

Boeing is able to grow its backlog to 1,044 unit backlog and keep pace with the Airbus backlog of 744 units from a production perspective. At this time the customer could safely order the Boeing 787 up to 361 more units before it becomes even with Airbus backlog when comparing both framers production capability, since Boeing will produce 14 787 units to the Airbus guidance of 10 A-350 units per month.  

The Five Year Blogging Mark

I have said several times, I'm done with writing the blog. However, since I'm still "dabbling" with the blog, it is important to note it was five years ago, I started the first experimental posting seeing how this blog thing would work. In commemoration of the first test blog I am linking it to this first posting for posterity's sake.

October 17, 2012 (1,231 postings and counting)

British Airways Announce Start Of First 787 Construction

Here is the BA book today it has added the 787-10