The Aggressive Nature of Boeing's "All Hands On Deck"

Ever wonder why Boeing sales have taken off in 2018 which was predicted to be a down sales year? You are not alone. Perhaps 2017 was just an anomaly as both mega builders, Airbus and Boeing booked about thousand airplanes each during 2017, but Boeing was honing its strategic spear. It had a big tent approach to its market. An airplane customer walks into Boeing's tent and asked for military accessories. 



The sales chief offers, "it's on aisle 17 just behind the drone section hanging from the tent beams".

Not only does Boeing have drones it has a whole world-wide customer services campaign. It has established a way for an airline customer to get from Actuators to airplane ZZZ's and that's in the seat department. An airline can hire Boeing to maintain, build and fly your business. The real secret to the Boeing sauce is that all hands are on deck welcoming the buyers and talking the same language with one another. One sales trooper will grab a peer out of ancillary sales department and say, 

"I want the airline customer to shake this person's hand, they can fix you up with a fully automated Boeing product kiosk of your choice"  The ancillary salesperson starts talking how good is the Max 7 and if you can't go big, the Max 7 is just the right size.

Hold on, "I thought we were talking airport kiosks," says the customer?

The sales team looks on with a knowing smile and mutters to the customer, "let's go to dinner".

Over the horderves, "You have no airplane, No ground team, no problem,  we can build your airline for you in this big tent. You say you need a headwind report on a route? No problem it's on aisle 22 just behind the weather balloons which are behind computers and wifi department. Did I mention the Max 7 flies 3,800 miles connecting almost any paved landing strip, anywhere? The headwind wind women can help with your Max 7 order as well before you check out. Did I mention loans?" 

"We have a banking kiosk at the front, making loans, just for airlines needing anything under this big tent, we are currently loaning with favorable rates on the Max 7".

Before the main course is even served the customer is beginning to get it. Every salesperson is on deck with the full suite of Boeing product. Not only on deck, but they can put together the deal and get you the right people to do it! Even as far away as aisle 39  located in the far corner of the "Big Tent".

The DIY airline only wants airplanes and that's it. The Boeing, "no problem team", spurs into action and offers the right airplane for DIY airlines, of course, the Max 7, at a sensible discount.  

The Airbus sales teams are looking for the "Big Tent's" exit, nobody got the memo and they are lost.

and... that's why 2018 is having a great Boeing sales year.

Oder Wars 787/777X VS A350 ULR

There airline carriers all over the map pleading for big RFP's from both Boeing and Airbus. June saw the news about Qantas, New Zealand, and Oman asking for airframe what if's from the makers.  The airlines want to go big in passengers and miles. Project Sunrise is a Qantas tease for either mega airplane maker. New Zealand well entrenched with its 787-9's seeks to provide service across the wide Pacific going to both New York and all destinations possible in South America.

Oman wants a bid with the 787 and A330 much like Hawaiian airlines just held where Boeing won the day. The wildcard is how the 777X can play into the deal-making. The A350ULR is the Airbus hold card for both Qantas and New Zealand deal making. The 777X becomes the spoiler and timing of such an aircraft the determiner. Airframe price is an influencer on those who seek a fleet strategy. Since Boeing already has a foothold on all three airlines mentioned it has a good chance of winning orders from two out of three mentioned. The fleet A-330 is hiding in the background as its models' age so the 787 has to go against replacing those older A330's with a 787 instead of an A-330NEO. Hawaiian went with Boeing in the same circumstance and Airbus may be in the mood of giving away is airframes on the cheap. Its airplane ordering trench warfare and Boeing has the high ground at this time in the A-330NEO battle.

June saw a lot of airplane talk about what airlines are looking for and both makers heard those talking those points.

How Long Is The 797 Vision?

The 797 idea may have started before the 757 stopped productions during the year 2004.  Boeing shelved the middle of the market concept when there was no 757 replacement revealed to the public. It had its hands full with the 787 and other models of 777 and the Max. It was a running battle with Airbus and airplane supremacy. The time has come where years of engineering with other programs and the now apparent 797 program has occurred.  It was stated by another aviation journalist that it takes 10 years to build a clean sheet design before it is delivered. Counting back fourteen years may have signaled a back room engineering design had already hatched for a 797. It depended on the 787, and the 737 Max to make it happen.

A 797 has been a WIP for at least five years as it gathers technology developed by all Boeing's commercial aviation programs. Its been the last three years Boeing has consulted with its customers for the perfect NMA that would fill a 4,000 plane gap between the Max and the 787. Ten years may be a correct estimation for a clean sheet and Boeing has already checked off many of those years pondering its NMA program. It has reached the point of just freezing the concept and announcing the launch customers.  Boeing is further down the launch road than pundits may like to think out of some deduction and logic.

A 797 launch is going to happen sooner rather than later. It has unused plant space or property space for building an immense 797 facility. It makes sense to move the Everett 787  production to its own sole source facility in Charleston, SC. The SC facility can build all the 787 types by expanding on its vast acreage, at that site with more cement and steel buildings erected. The supplier system is in place in SC and Boeing has proven it can build production space very quickly, as in under 18 months. 

The 797 Jumpstart will occur in the Northwest as the 797 is refined into a flying copy while additional 787 production comes with building all the 787's at Boeing's Charleston, SC site. It can and it will deliver 14 787's a month from that site. It has already proven the low country can do what it is tasked to do.

However, Boeing-Everett is up to designing, testing, and building the 797 under a very close watch from its expert engineers who are experienced in the new plane programs. A natural logic would be for having the 777X, 747F, and 767F-Military all occur in Everett, WA. The 797 could and will fit in the production within this Northwest location. It's a natural decision to fold in the 797 on its available floor space since it became open when surge lines evaporated and other programs wound down. 

Boeing has space and has very capable people anchored in the Northwest to do this program starting from its already and current three-year-old design points, reducing its ten years required for a first delivery clean sheet down to seven years, and ending with first delivery in 2025. 

Boeing doesn't have to retest the copyrighted technologies it developed over the last 15 years. It only has to integrate those technologies into the 797. It is what Boeing already has available without using risky testing processes or using any untested assumptions since those technologies were already de-risked from all other programs mentioned from Boeing's family of aircraft.

The unknown 797 engine program is the NMA's biggest hurdle and it seems logic will put Boeing into accepting a 50,000 thrust engine from GE/Safran as its sole 797 source engine offering. Boeing would not improve its market with a dual engine maker choice for its customers. The 797 stands alone and an Airbus counter would most likely be developing an A321 off-shoot with A Rolls Royce engine at the forefront. 

The development engine time at this point from a clean sheet is about five years. The Boeing engine supplier has been working on an engine concept over the last three years. At a launch customers announcement, an offered engine will already have thousands of hours run through its casings.

Boeing Beats Airbus YTD, by 3-1 After May Count Totals

Total order numbers reach a net 306 orders for Boeing's as of May 31, 2018 date as compared to the Airbus tally of 111 units. This is almost a Boeing 3-1 order lead before Farnborough Airshow the chart below recaps Boeings month and YTD totals. The month reported 43 net orders added during May. The big number was the 787-9 and 787-8 orders for a net number of 10 -9's and 2  -8's bringing the 787 net total to 83 for its YTD number.

Rolls Royce Package "B" Is Sent To Detention With Package "C"

Rolls Royce is having one of those years. First its 787 engine Trent 1000 Package "C" started disintegrating its fan blades, then came an inner compressor flaw and now 166 of its Boeing Trent 1000, Package "B", engines have been flagged and will be sent to the penalty box until further notice. 

The Winging Tally shows Rolls Royce has its engines on 273 787's or times two it has delivered  546 engines to its Boeing customers. Package "B" engine review equals 166 as mentioned above. It was reported that Rolls Royce has 380 affected engines for inspection delivered to 787 customers. In total the affected Rolls Royce engines now tally 546 engines under review or needs fixing.  These numbers don't include spares but do address units flying with paying customers. Otherwise, the whole lot of 787 Rolls Royce Trent Engines are now under a review or needs immediate fixing. The FAA has restricted the 787 with Rolls Royce Package "C" from flying 140 minutes away from an airport. The ultimate and prior rating was for 330 minutes from any applicable airport, The 2 hour and 20-minute flying window hobbles Rolls Royce customers to lease older airframes or models as a fill-in while the 787-Rolls remains grounded or under a mechanical fix process. 

The company just announced a 10% across the board lay-off of employees while it halts certain field and production operations until a resolution is completed. A speculation is that Rolls was chasing the GE engine performance and it pushed through solutions within its jet engineering that failed to hold up during airline operations. It also may end up making the Dreamliner a one engine aircraft if Rolls doesn't solve its current engine crises.  A situation GE would love to address with Rolls Royce customers having Dreamliners.

FYI:

Is it possible to re-engine aircraft with different engine options?

The two different engine models compatible with the 787 use a standard electrical interface to allow an aircraft to be fitted with either Rolls-Royce Trent 1000 or General Electric GEnx engines. This interchangeability aims to save time and cost when changing engine types; while the previous aircraft could exchange engines for those of a different manufacturer, the high cost and time required made it rare.

The benefit of interchangeability makes leasing aircraft easier for the lessor, as their fleet would be compatible with all the airlines and their existing facilities.

Denver Mile High Will Go to 150 Gates

It already has 6 long runways. The lengths of 12,000 ft or 16,000 are immense. It is known that Denver could double its runways to 12 if required. By 2021, it could handle a mass aviation exodus from the eastern part of this nation. The addition of 39 new gates was reported by AirlineRatings. 

That means, when completed, in the next three years, Denver could handle another 39 flights every hour for taking-off or landing while bringing the total gates capacity to 150. If an airplane holds 200 passengers, then every hour could see a 30K passenger exchange. 

Immense came to mind, but other insidious thoughts float to the top of my head. In a time of war, Denver is known as the DC of the west. The rocky mountain front holds vast underground facilities only a 30-mile shot from Denver International Airport. Of course, that could transport 30,000 people via interstate or the rumored underground rail system to the Rocky Mountain front. Most of DIA terminals have rail connections in its terminal basements. 

Some tracks lead into cement doors and nobody knows where those lead. Riding a "passenger car" to the terminal of your destination and looking out its window, one can see those track spurs to nowhere. I have and have wondered what's up with that?

Going to internet rumor sites concludes it's not a good idea to investigate too far into your imagination without a good exit plan. However, 39 new gates and the possibility for another 6 runways makes one wonder a lot. 

The situation room is rendered on DIA's massive murals when walking unescorted through the terminals. The tent-like architecture speaks of a nomadic center for people wanting to become lost.

Airbus (May's) Net Order Numbers Lag Boeing's April

Airbus has 111 net orders for 2018. It is in a real dogfight for order supremacy with Boeing during 2018. Single-aisle is 108 and Widebody class is a net 3 orders for 2018. Farnsborough is coming in July and it could all change. The lead could increase for Boeing.

Airbus Widebody thru May 2018 Net Orders

The GAO-18-321 F-35 Fix It !!! Report

“No more bullets” are required by the GAO on the F-35 program. Elmer Fudd says has 111 class I deficiencies of which 47 are under the hood fixing at this time but that’s a lot of untouched class I’s. It also has about 855 class II’s fix it before the 2019 full rate production deadlines are reached. Or it’s a fix it before you buy it call-out.

No more money unless it is fixed says the GAO. 

Here is the summary F-35 GAO Sh** list

Fuel Prices Driving The Airline Business In "The Blue" Period.

An eye trained on the rearview mirror is watching aviation fuel prices going upward. Many years ago (2014) the axiom was established, "The lower the price of crude oil the older the airplane in your fleet is best". In fact, many airline fleets sought after the used airplane market for a lower purchase price thus allowing for a greater fuel burn when Jet A was cheaper.

It was fashionable for airlines to go after inventory from lessors or others who were seeking to unload old inventory to anyone with a fat checkbook. So the axiom grew out of opportunity and Boeing suffered additional sales loss for its super-efficient 787 products due to low fuel prices. In fact, airline fleets had to dust off its opportunity math models considering cash flows and profits while operating older equipment versus buying more expensive equipment like the 787.

Recently it was said by Randy Tinseth, Boeing’s vice president of marketing, 

"Aircraft replacement makes sense for airlines when oil reaches $65 a barrel." 

As of Tuesday morning, the price per barrel of Brent Crude was more than $74.

That all being true, a pent-up energy has grown from old equipment getting older while ignoring efficiency becomes the ban of having higher fuel prices. I'll call the high price of crude the "Blue period", signaling a market shift from having old airframes to having more expensive and efficient new aircraft. The factors to consider is the savings obtained from a more efficient aircraft burning less fuel as compared with an older aircraft burning more fuel. At this time it could be up to 25% fuel volume savings using higher priced fuel. Or a 30% maintenance improvement 

Cash flow models are humming away in some computer under a desk supporting a huge screen for office meetings. The old fuel model may have had $1.99 per gallon fuel price. The new model may have a $3.99 a gallon price for Jet A, worldwide. The old (767-300) aircraft burning 12,000 gallons, going far, with full fuel load will compete against an efficient model that burns 3,000 gallons less than an older aircraft on the same route. At a $2.00 a gallon price variance from old to new fuel price, the new having a 3,000-gallon advantage, therefore, saves an airline $6,000 a trip not counting the new technology maintenance savings found on the ground, or in the avionics. The savings could easily reach a $10,000 in savings going long one-way.

Buying new equipment may make more money than hanging onto older and cheaper equipment if fuel prices rise higher than $65 per barrel of crude oil. The financial performance models in an office building near an airport may scream, " buy new equipment" such as Randy Tinseth suggests in above comment.

Old equipment has the following conditions:

·      Lower capital (purchase price)

·      Lower interest costs (loan costs)

·      Higher maintenance cost per trip

Naming a few 787 costs conditions:

·      Higher Capital outlay (purchase)

·      Higher interest costs (loan costs)

·      Lower Maintenance expense

·      Lower Fuel Costs

·      More efficient operational functions (such as onboard smart routing tools)

If a new 787 goes 500 trips a year saving fuel costs over old equipment then it may save $1.2 million a year in operational costs which would contribute towards an advantage over buying old equipment flying on cheaper fuel which no longer exists at this time. Randy Tinseth, stated an obvious market condition. Airlines will have to buy new equipment sooner which is better than later as fuel prices rise.

The Airbus A-330 Program Has Some Concerns

Its an A-330 market crumble. They had customers but few in number relative to the few orders received. In fact, the A-330 book stood at 300 units in its backlog after Hawaii canceled its batch with Airbus. Then the Iran deal and Trump closed off another 32 A-330 NEO 900's and another 4 of its CEO A-330-200s. Out of 36 A-330 booked it will have snuck two units out for delivery to Iran before the embargo began.

If Airbus makes fifty A-330's a year with this standing order book the program closes its doors in four years provided it gains more orders and doesn't lose any more orders. The pinnacle moment was when the Iran deal closed out 34 orders already booked by Airbus. Dropping those dead orders lowers the 300 unit cushion it had made down to 266 units for filling until its end. The notion Airbus will sustain this program by selling hundreds of A-330 in future years becomes a risky notion. 

More customer may convert orders over to Boeing if it announces its own NMA this year. The A-330 has had only one order in the first four months of 2018 which signals an ailing program unless Airbus has more bookings yet announced or unrevealed during the month of May.

Airbus cannot withstand a sub 50 unit order year for the A-330. A  trend has started with Boeing as it low balls its 787 fleet offerings against anything Airbus offers. If the current market trends are maintained for another several years, then the A-330 NEO program becomes a big Airbus failure.