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Saturday, August 24, 2013

737 Max Parsing Through The Single Aisle War

Reading through the Boeing.com press you sense how serious this business of building the single aisle market arises to a fever pitch. The buzz word of the year from Boeing is "discipline". The Max is not your brothers 787. The build process is disciplined, not ambiguous or a meandering onslaught of lessons learned that were found in the 787 project! The 737 Max is marching in lock step to 2017, so says the Boeing VP, Scott Fancher.

"Through our disciplined development on the 737 MAX program, the team has retired key technology risks," said Scott Fancher, vice president and general manager, Airplane Development, Boeing Commercial Airplanes, during a briefing at the 2013 Paris Air Show. "We have informed our customers and they are pleased they will be able to put these more fuel-efficient airplanes in their fleets sooner than planned." 



Then Later, on July 23, this statement comes out by a different spokesperson off the same script.

"We have defined the design requirements for the 737 MAX that provide our customers with the most value in the single-aisle market," said Michael Teal, chief project engineer, 737 MAX, Boeing Commercial Airplanes. "We continue to follow our disciplined process to ensure that we have completed all the requirements for the development stage of the program and are ready to begin the detailed design phase."  


The Takeaways from Boeing's scripting:



  • Discipline, discipline and discipline
  • Chopped off one quarter of time... 3rd  QTR 2017 because of our discipline.
  • 8% better than the NEO
  • For further details read on with the Blah Blah section.
  • Design Scope is now  frozen and design details are now under construction.
  • Design details will be completed before 2015. 

Parsing the word, "discipline", demonstrates the 737 Max is well beyond the bravado of the 787 process at this junction. Everything learned with the 787 can be installed onto the Max not requiring an agonizing process like the 787 experienced. Rather than adding on additional delay time in years like the 787, the Max discipline has  already removed 90 days of time, before the first test model. This A team is not in a learning school for the unknown, like the 787 team found out, but is a virtuoso of 737 Engineers, suppliers and aviation journeymen, using tools and materials they play with everyday. 

I would expect another quarter or two chopped off before the deed is done and an expecting framer to roll out a customer aircraft during the first quarter 2017. The Max innovation stays within the relevant range of proven technologies across the board, including newly proven 787 type technologies as Boeing levers lessons learned just paid for into the Max. That is why the Max Timeline will continue to shrink as it parleys  its vast resources into the Max without fear of a substantial set backs. This airplane should excite the customer base and balloon the customer orders in 2014 after the detail designs are fixed and suppliers retool its support. 


                                                  

Friday, August 23, 2013

The 787 Phase II Testing Draws To A Close

Phase I: The engineers, assemblers and subcontractors  completed its tests in phase I years ago, and continue to test the aircraft throughout the phase II part which is now drawing to a close. Phase I consisted of the first 6 test models and its static model in the stress test. It was a proof of concept program that validated the whole idea of a plastic airplane and its feasibility in its own marketable class. This phase was completed well into 2010. Phase II began when ANA and Japan Airlines took delivery of its first Aircraft late in 2011. Marking the beginning of the customer test period or phase II.

The period of time where customers who are not engineers, trained assembly staff and do not have the wealth of scope that subcontractors store for all the 787 millions of parts. The first 100 aircraft were originally proclaimed as a block point for assessing and improving from the proof of design, clear to unit number 100 entering service. A million or more passengers, a dozen or more airlines and millions of miles later, most of faults are flushed out, where the original test mode could have not discovered by the experts, only in operation mode by flight worthy 787's.

Only operational customers around the world could discover with its crews, maintenance procedures and its customers who merrily ply the sky-ways experimenting with the touch screens, cup holders and window shades in total ignorance of the technology. They enjoy the experience so much that the 787 is rated a top performer by its customers. Even though through battery fire and mishap it turns out to be a fine  airplane by an undaunted build number 100 entering into service.

Phase III: Refine the product from all lessons learned.

Now Boeing is striking forward with the -9. Build it like the best -8 off the line by adding all those lessons learned, and you have a world beater in the -9. Lufthansa is contemplating obtaining an Airbus A-350 or not, one A-350 that has not been tried by fire. They are looking at the 787 family, and how that would translate to the 777-X when fusing the excellent 777 performance with 787 milestones that are now part of Boeing's DNA for building advanced aircraft. Boeing definitely has the high-ground at this point over Airbus, but lacks the European loyalty towards Airbus. The question remains for Lufthansa board members. Can the Airbus come close to Boeing's offering in size economy and advancement? If so, then it will be a split order between the cheery pickings from both Boeing and Airbus.

However, if Boeing's demonstration in the sales room and shows Lufthansa the whole package, producing a reality for the 787-9, -10 and the 777-X plan in such a way, by retiring all roadblocks through water-under-the-bridge presentation from the 787-8 program, during these last two years. Then the enticement to buy is extremely strong. Lufthansa cannot afford developmental holdups from either framer. Boeing is much further down that road than Airbus is, at this time. Loyalty takes a back seat as Lufthansa  ponders its destiny with either framer.  A mixed order is a safe decision. Going all in with either Boeing or Airbus is a bold statement of changing Lufthansa fortunes and with a plan for the future.

If Boeing doesn't get the order for 50 wide bodies as an exclusive order, not all is lost in battle. Its only loyalty skirmish from Europe. If it remains a mixed fleet order it is a hedge bet by Lufthansa delaying what framer has the upper hand in Europe. How important is this order for Boeing ? As in very important. It would signal a Sea Change for European thinking that may spill over to Air France and other significant
carriers for that market. The Middle East carriers have infiltrated the European market from Qatar, Doha and other players. Air India is siphoning tickets from London Heathrow and Frankfurt Germany. Qatar is moving quickly with its 787 equipment into Europe. South East  Asia and China likes what it sees in the 787. A change is happening now at a rapid pace. How fast can Lufthansa get into the game with the right choice, is the lynch pin for Boeing sales push. By lining up its carriers that are invading Europe, can the A-350 stem the 787/777-X tide for Lufthansa?

That is a September 18, 2013 question! Now back to the Phase II customer testing thoughts, and the unit 100 block point. LN107 is the 100th customer made in sequence, shipping to ANA. Boeing has gone past this number with its-in-the-works frame at number LN138, and is only 21 frames away from the 100th delivery, since delivery of number 79 today to China Southern. Boeing has had a rolling improvement system, where any updating to 787 aircraft is  done on the fly, whether its in the factory, flight-line or in service. The bulk of customer trials are closing off leaving only the continuous improvement items to run into infinity. The engineers and plant  players are striving to beat the competition every day. Now the tricky question, What will Lufthansa do? I want a Sea Change Order go to Boeing, but will likely see a hedge order for both framers, because Lufthansa doesn't have solidarity in the board room. The board maybe split between visionary, and customer loyalty types. Exclusive order for Airbus opens Europe for its back door competitors. Such as all the above mentioned  players from the mid-east and India.

Thursday, August 22, 2013

Big Order On The Lufthansa Front All Quiet For The Framers..

Nobody is talking about a 50 aircraft 10 billion dollar deal Lufthansa is crafting for its equipment enhancements. Because it has a predominant Airbus portfolio, it is interesting to watch this order. There are Boeing Aircraft in the stable. Particularly the 747-8i.  A harbinger of openness for mixed fleet and follow-on commonalities. The 787-10 has a relative short backlog for Boeing compared to the Airbus family of aircraft for the A-350, which has not rolled out to market as of yet, giving Boeing breathing room on the time line of delivery and providing, Lufthansa time to market after next months announcements.

Lufthansa could build its order on the 787 family of aircraft as some slots could come available in each 787 model. Lufthansa could also replace A-330 with the 787 -800 in the next five years. They may see an opening for 2017 delivery time on 787 as well as 787-9's by then. Five years of planning is consistent with that large of an order locking in at 2013 prices and positioning itself for an inflationary future value on money. Once again the Boeing glitches are starting to fade, and Airbus has not sailed in that storm with its A-350. The hand is weighted in Airbus's future potential. But in 5 years its the A-330 and A-340 that will be a second tier aircraft. Lufthansa inventory will have aged its Airbus and Boeing inventory making this order strategically  significant. It definitely points to Lufthansa intent. Refer to the chart below of wide body inventory for Lufthansa.

Widebody Jets

Economy class

Aircraft with seatmap Seat Pitch Seat Width Seat Type Video Type Laptop Power Power Type Wi-Fi 
Airbus A330-300 (333) V131-32.017.5StandardPersonal TVNoneAC PowerNo
Airbus A330-300 (333) V231-32.017.5StandardPersonal TVNoneAC PowerNo
Airbus A340-300 (343) V13217.5StandardPersonal TVNoneAC PowerYes
Airbus A340-300 (343) V232.017.5StandardPersonal TVNoneAC PowerYes
Airbus A340-300 (343) V332.017.5StandardPersonal TVNoneAC PowerNo
Airbus A340-300 (343) V431-3217.3 - 19.3StandardPersonal TVNoneAC PowerNo
Airbus A340-600 (346) V131.017.0StandardPersonal TVNoneAC PowerNo
Airbus A340-600 (346) V23117StandardPersonal TVNoneAC PowerNo
Airbus A380-800 (388)31.017.0StandardPersonal TVNoneAC PowerNo
Boeing 747-400 (744) V131.017.5StandardPersonal TVNoneAC PowerNo
Boeing 747-400 (744) V231.017.5StandardShared TVNoneAC PowerNo
Boeing 747-8 (748) V13118.5StandardPersonal TVAll SeatsAC PowerYes
Boeing 747-8 (748) V23118.5StandardPersonal TVAll SeatsAC PowerYes

Business class

Aircraft with seatmap Seat Pitch Seat Width Seat Type Video Type Laptop Power Power Type Wi-Fi 
Airbus A330-300 (333) V164.020.0Lie-FlatPersonal TVAll SeatsAC PowerNo
Airbus A330-300 (333) V257-60.020.0Angle Lie FlatPersonal TVAll SeatsAC PowerNo
Airbus A340-300 (343) V157-6019.7Angle Lie FlatPersonal TVAll SeatsAC PowerYes
Airbus A340-300 (343) V257-60.019.7Angle Lie FlatPersonal TVAll SeatsAC PowerYes
Airbus A340-300 (343) V357-60.019.7Angle Lie FlatPersonal TVAll SeatsAC PowerNo
Airbus A340-300 (343) V457-6020Lie-FlatPersonal TVAll SeatsAC PowerNo
Airbus A340-600 (346) V157-60.020.0Angle Lie FlatPersonal TVAll SeatsAC PowerNo
Airbus A340-600 (346) V257-6020Angle Lie FlatPersonal TVAll SeatsAC PowerNo
Airbus A380-800 (388)57-60.019.6Angle Lie FlatPersonal TVAll SeatsAC PowerNo
Boeing 747-400 (744) V157-60.019.7Angle Lie FlatPersonal TVAll SeatsAC PowerNo
Boeing 747-400 (744) V257-60.019.7Angle Lie FlatPersonal TVAll SeatsAC PowerNo
Boeing 747-8 (748) V17819.7-26.4Lie-FlatPersonal TVAll SeatsAC PowerYes
Boeing 747-8 (748) V27819.7-26.4Lie-FlatPersonal TVAll SeatsAC PowerYes

First class

Aircraft with seatmap Seat Pitch Seat Width Seat Type Video Type Laptop Power Power Type Wi-Fi 
Airbus A330-300 (333) V185.021.0Lie-FlatPersonal TVAll SeatsAC PowerNo
Airbus A330-300 (333) V285.021.0Lie-FlatPersonal TVAll SeatsAC PowerNo
Airbus A340-300 (343) V18521Lie-FlatPersonal TVAll SeatsAC PowerYes
Airbus A340-300 (343) V285.021.0Lie-FlatPersonal TVAll SeatsAC PowerYes
Airbus A340-600 (346) V185.021.0Lie-FlatPersonal TVAll SeatsAC PowerNo
Airbus A340-600 (346) V28521Lie-FlatPersonal TVAll SeatsAC PowerNo
Airbus A380-800 (388)90-92.031.5Lie-FlatPersonal TVAll SeatsAC PowerNo
Boeing 747-400 (744) V190-92.021.0Lie-FlatPersonal TVAll SeatsAC PowerNo
Boeing 747-400 (744) V290-92.021.0Lie-FlatPersonal TVAll SeatsAC PowerNo
Boeing 747-8 (748) V18531.5Open SuitePersonal TVAll SeatsAC PowerYes
Boeing 747-8 (748) V28531.5

Open SuitePersonal TVAll SeatsAC PowerYes

Analyze this wide body inventory and you could see how the A-330, A-340 inventory may retire with the 787 family coming while Airbus perfects its offering not even guaranteeing if could beat the 787. If Boeing continues with solid performance during this next month, a bird in hand axiom comes true that its worth more than two Airbus' A-350 in the field. Boeing threats are the 787-8,-9,-10 and most importantly the 777-X (-8,-9). The big clue is the numbers game. $Ten billion a rough number, fits right in at the 787 200 million list price for 50 aircraft depending on the order mix. My order book on ten billion go as follows: 15 787-8, 15 787-9, and 10 787-10's. Leaving 10 for the 777-X topping off the order at 10.5 billion for 50 Boeing. This is a fleet renewal order with the aircraft and the best aircraft.

 I can't get inside Lufthansa's head about this 50 plane order, but I do know Boeing's foot is in the door while Airbus is still seated in the main office. Unless Boeing has made its case through its customers who really like the 787 and are beating the socks of Airbus product through consumer polling found in travel magazines. Boeing is being rediscovered and people really like the ride.


Reference Article: 

Lufthansa to place $10 billion plane order next month - sources