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Wednesday, April 15, 2015

Copa, Hainan is sloughed into Boeing's Order Book Hand (Corrected)!!!

Recent confirmed orders have not shown on Boeing's order book on its website.

Here is  the Boeing Book on April 15, 2015. I have taken the liberty of showing what Boeing hasn't updated in its order books. Edited numbers on Boeing chart below show in bold blue colors.

Boeing will wait until all participants are in alignment with a sales transaction and may even go unidentified on its listing already. However for posterity sake I have added them in just the same. Hainan has a split lease buy deal. It will lease 6 787-9 from a lessor and buy 24 787-9 directly from Boeing. A future line item will show up from a lessor for 6, 787-9. So you see there is more pen, ink and paper to go before the 787-9 orders is recognized on the books. Thirty-two unidentified 787 are suspicious. If Hainan and its lessor are the unidentified 787's then the book will go back by 30 units and become a total order book of 172 instead of the 202 I projected.

Secondly, Copa has announced the Max deal with a combination of Max single aisle aircraft. No details have been disclosed at this time by the press. So I will assume the details are not finalized and its a no show on Boeing books until its all settled by its customer for its 61 Max reported sold. Below is temporary look at the order book during my spring madness. More orders are in Boeing slough-off mode and remain hidden from reporting. A rumor exist of 6 more 787 not reported yet, because the Deal is not final. It might also be through a leasing company as well. It gets complicated until Boeing announces. I am patient, but its good to know the year has started strong after last year's amazing ordering year. The year won't be amazing, but it will become very interesting within the world of airplane market place with more significant orders to come.  



2015 Net Orders663-734110

Customers737747767777787Total
Alaska Airlines6----6
All Nippon Airways
Copa
5
61
---38
61
GECAS2----2
Hainan
Korean Airlines
---
5
30

30
5
Ryanair3----3
Silk Way Airlines-3---3
Unidentified Customer(s)55--23289
2015 Gross Orders1323-765207
Changes-5----1-6
2015 Net Orders1273-764202
Boy oh Boy oh boy, I blew it! The 51 of 55 unidentified 737 were Copa's and Hainan's must be in the 32 unidentified 787's. Boeing has updated its table below. Thinking so hard to do most days!
April 16th 2015 Boeing Update:




2015 Net Orders6631734111

Customers737747767777787Total
Alaska Airlines6----6
All Nippon Airways5---38
COPA Airlines51----51
FedEx--1--1
GECAS2----2
Korean Airlines---5-5
Ryanair3----3
Silk Way Airlines-3---3
Unidentified Customer(s)4--23238
2015 Gross Orders7131735117
Changes-5----1-6
2015 Net Orders6631734111




737747767777787Total

Tuesday, April 14, 2015

Fully Functioning Runway 11/29 Indicates 787 Completness

In Everett Washington at Paine Field, is a runway number 11/29. Apply named the Crosswinds Runway for its NW to SE axis during times of cross winds, it can land small aircraft. But it doesn't. It merely acts as an indicator for Boeing's robust 787 program. The indicator shows a backlog of early 787 parked in the symmetry of  of a long line.


Matt Cawby Photo Credit See kpae.blogspot.com "support KPAE" August 2014  photo


When this long line empties, Boeing has cleared the airplane decks. The news is, Boeing has revealed a cleaning out and said, "in 4-8 months all early builds of the troublesome 787 will be gone," by suggesting they will be in customer hands or moved into a production refit center.

Runway ownership belongs to the Paine Field Airport Authority, not Boeing. Damage to the runway belongs to Boeing as aircraft sink further into the asphalt. Boeing will make it right with Paine field. This is a small runway for small aircraft, not the 787. This runway would be used during times of strong cross winds. The north/south axis main runways are used by all heavy aircraft. Paine field plans improvement and Boeing plans a full functioning Just-In-Time production model.

Currently Boeing builds 787 with skill of a juggler. Some go to the flight line for its completeness stage, and some go to the rework center since space is a premium. Those going indoors are placed in long-term parking as it completes. Those aircraft are for customers needing a buffer of time before delivery. The longest term parking are the dead aircraft waiting for buyers such as the early build 787 waiting on 11/29.

The "just new" Flight line aircraft receive its completeness parked outdoors, as they are already purchased with customer crews who are camped out in Everett during waiting, testing and studying about its intended 787.

That is why Runway 11/29 is so important. It becomes the flare gun shot in the air once the runway empties of 787. Boeing becomes "787 production optimal"! It represents supply chain problems are mastered, it represent program maturity for building the 787, and finally it represents Boeing has reached its break even point for the 787 project. Boeing has predicted 787 Break-even by the end of year 2015. Runway 11/29 is not just a number/name, it's emptying represents everything for both Boeing and Paine Field moving forward.   Boeing's and Paine Field's ABC goal:
  • Availability
  • Break-even
  • Completeness

Saturday, April 11, 2015

Copa Airlines Of Panama Scoops up 61 Max 737 with order

Panama is emerging into the 21st century nicely. It has ordered both the Max-8 and Max-9 totaling 61 737's. This may  signify Boeing has answered all questions concerning the Max since the CFM engine performance shortfall with its own bench testing. I would call this a normalizing order year for Boeing as it seeks tying up all loose ends in the order works. Copa Airlines, a long held Boeing customer, is going long with the Max-9. Below is the recent livery for Copa Airlines.

Image result for Panama Air

CMP is Copa Commercial Identifier

Friday, April 10, 2015

VN-A861 Rolls Out Vietnam Airlines; It' s 787 #300 built (Updated-seat count)

This is an auspicious occasion at many levels. First it's Vietnam Airlines initial 787-9 for any type of 787. Second it's Boeing's 300th 787 when pushing out its first 787 since 2007. Even though Vietnam Airlines also has on order the Airbus, A-350-900, the significance of Vietnam Airlines first 787 is not lost on a nation or its airline. However, there is a race to first delivery. Airbus, through an Aer Cap order (14 A350-900) has recently painted a Vietnam Airlines livery on the undelivered leased aircraft. The Boeing 787-9 is scheduled for delivery by May  31, 2015. The Boeing aircraft seems to be just about a week behind, as it has not been painted its new livery. All Things 787 Blog  <Link reference with its feature article today.

AerCap Lease for Vietnam Airlines Airbus A350-900
Image result for vietnam airlines a350-900

Business NA
Deluxe Economy NA
Economy NA

Three class typical is 314 depending on pitch dimensions.

The Boeing 787-9 will be a similar size with 274 seats.
 Photo credits  The designair.net <Link


28   Business Class  7 rows
35   Economy Plus   5 rows
211 Economy         23.5 rows
Total  274              35.5 rows

28 1-2-1 VNA 787 Business class
VietnamAirlines787_4

35 Economy Plus 2-3-2, 42" Pitch
VietnamAirlines787_5

211 Economy 3-3-3, 32" Pitch
VietnamAirlines787_1

Airbus Goes Totally private in Business Class, my guess 28 seats

VietnamAirlinesA350_1

Premium Economy 3-3-3, no seat numbers available, you guess from the picture. My guess 45 seats
VietnamAirlinesA350_2

The venerable Economy 3-3-3 my guess 198 seats based on 22 rows

VietnamAirlinesA350_5

Total nonsensical estimation is 271 305 A-350-900 seats
Having?:
Business Class:     28 29 seats 7 7.25 rows 1-2-1
Deluxe Economy: 45 seats 5 rows 3-3-3
Economy:            191 231 seats 22 25.67 rows 3-3-3
Total:                   305  seats  approximately 38 rows

Total 271 seats? Nawh, they have to go bigger by at least 5' or in seats somewhere (24 25.67 rows?). Let's add on and make it 208 231 in economy for Airbus and total it at 299  305 seats just because Winging It can make it so!

I found it and it took a while, its official. Its now an Update for Vietnam Airlines Blog:


Credit citation for chart below <Link (Center for Aviation) CAPA

Vietnam Airlines A350 and 787 configurations: Mar-2015

Business
Premium Economy
 Economy
Total
Premium Share
Economy Share
A350-900
29
45
231
305
10%
90%
787-9 v1
28
35
211
274
10%
90%
787-9 v2
28
0
283
311
9%
91%
Version 2 will carry Maximum passengers as it dedicates 283 seats to the economy class, plus 28 business class seats, as it will have the ultimate seats available totaling 311 within this most recent purchase as compared with the A350-900 purchase. The Vietnam Airlines purchase bundle is for 8 Boeing 787-9's, and 14 Airbus A350-900 of which four are leased with 10 purchased. The version numbers of 787-9 is not disclosed at this time. Assume 4 v1's and 4 v2's. 

Tuesday, April 7, 2015

Boeing Already Dipped Under The Airbus WB Order Backlog.

If you ordered a A350 900, -1000 today when can you expect to get one? Boeing has about 847 undelivered 787's as of today. Airbus has about 778 undelivered A350's with two delivered in four months.

Boeing will deliver 120 787's this year and it will double that number until the end of 2016. Looking forward, with today's status report, and not counting new orders from this date in 2015 through 2016 its production numbers will total 240 +- additional 787's flying equaling almost 500 787 in customer's hands at the end of 2016. Airbus, if it builds 15 this year and possibly 60 in 2016, it will have 75 flying. This would include the two already delivered. I also look at Boeing guidance of 120 a year for the next two years. This would include the 30 already delivered for 2015. The Boeing number delivered is (90+ 120+258 = 468) 468, 787 delivered by the end of 2016.

The Boeing Countdown:
  • 90 Remaining deliveries during 2015
  • 120 delivery guidance during 2016
  • 258 delivered already, includes 30 delivered in first qtr 2015.
Total 468 delivered by YE 2016

Airbus Scheduled 15 A350 built in 2015 and Winging IT projects 60 A350 for 2016. In 2018 Airbus proposes 10 a Month A350's. By then the WB, in service gap, will widen with Boeing offerings than Airbus by a large margin.

*Flat estimations are frozen numbers from current data and production completions.

 Airbus A350  Boeing B787
2015 *Flat Orders Booked 780 1105

YE-16 Total Delivered Est.

75

468

Calculated unfilled Orders 2016.

705

637

As the chart indicates Boeing will have shrunk its order book beyond what Airbus can respond to during the next twenty months. Boeing has unleashed a 787 production juggernaut. The customers have noticed. They can get a 787 sooner than an A350. It can also get a 787-10 faster than an Airbus A1000, only If it orders now! All Airbus A350 orders placed today will come after a customer who receives a Boeing 787, if ordering the 787 on the same day as the A350. The 120 a year Boeing production pace passes a larger Airbus backlog easily in 2016, and will continue to grow in backlog order availability as the next 36 months go forward. Both aircraft manufacturers are positioned for taking on new orders, however an Airbus placed order hurts more for an earlier delivery time as it add backlog against Boeing's faster delivery pace, as compared with what a Boeing order will do to its backlog.

"If a 787 order is placed at the same time of a A350, the 787 will deliver first over the A350."

Going three years out in time,  Airbus starts lagging in the order pace having a larger backlog.
However, if the market looks at relative backlog as a order pacing metrics, Boeing will have the advantaged in wait time. If Boeing has a great 787 order year in 2015, then both companies will be in a equal position when considering its customers order flows and delivery time. All this assumes on gaining timely delivery times during a company's five year plans, and as manufacturers seek optimal backlog and wait times within a five year cycle.

"If Five Year Plans are critical to airlines, then the most flexible backlog wait time has the advantage over its competitor."

By 2018 Boeing will have a 150 aircraft order stream opened up over Airbus. It can take on 150 787 ordered in a given year and stay even or ahead of the Airbus' backlog wait time. By then Boeing will be delivering 12-14 787's compared with Airbus' guidance of ten a month. The delivery pace of Boeing keeps customers nearer to a delivery time when they order as compared to the Airbus production plan. Boeing will maintains its 3 year lead over Airbus and also expand its lead each when it produces 12-14 aircraft a month from its two plants.

Exhibit 1A:

Airbus A350 Boeing B787

2015 Flat Order Book 


780

1105

YE 2018 Delivered  Est.

Culmulative 

270 (1-1)

732 (1-1)

Unfilled Orders YE-18

510


373                 


Exhibit 1-1:


Prior years Delivery 75 468
2017 in year Delivery 75 120
2018 in year Delivery 120 144

Totals

270

732

Yes, there are slots created as customers change delivery times according to its own needs. A buying company can't wait for early slots before placing an order, otherwise it must depend on actual production dependability. Boeing has two separate plants mitigating any  production hiccups. Everett and Charleston are going big on the production floor, and can do so without obtaining another order for eight years.

The speed of which Boeing delivers, increases order potential over Airbus current capability, until it can fully reach maximum production output at the end of the next 20 months. Even though, Airbus capability may reach 10 A350 a month, it will compare with Boeings 12-14 787 a month corporate guidance during 2018. The Boeing/Airbus backlog gap will continue to grow from Boeing's capability of production and product efficiency steps found in its latest delivered airplanes. Vital 787 momentum, impels the buyer in Boeing's direction.

CFM's 800 Pound Gorilla Waits For Another PIP

CFM we have a problem. The all Boeing Max put its eggs in the CFM Basket which now faces a 5% short fall as reported by multiple news sources. The all-knowing reading techno junkies are now asking "Winging It to explain its way out of this mess Ollie". I can't and I won't explain the predicament Boeing now finds itself under. A 800 hundred pound Gorilla hung under the MAX wing is a show stopper in the single aisle order book as it would make the 737 Max more like a NEO in performance. If a person gets 20 miles per gallon with its loaded vehicle, a reduction of 5% directly results to a 19 mpg actual performance outcome, using the same operational conditions. A 20 gallon tank then has a range of 380 miles instead of 400 miles.  A CFM version engine has a 5% short fall then it translate into these roughed out numbers. A person can achieve a 5% short fall from tire pressure. CFM has to find the right tire pressure.

Apply a 5% penalty to everything in with simplistic analysis.

  • 4,000 mile range Drops to 3,800 mile range.
  • Seat cost per passenger rises by 5%.
  • Fuel Cost rise incrementally by 5% no matter the per gallon price.  
And so forth...

The actual percentages may vary per category as they are measures against the whole of the aircraft performance and operational costs. The main thing is that CFM has to solve its underestimation by 5% it sold Boeing in the next two years. The only Olive branch offered Boeing is,

 "We have two years to make it right!"

The question quickly shifts, can they really make it right this late in the CFM 1B level of development? Second place is for losers when there are many options including PW and other projects. Boeing has been bitten by single sourcing its engines for the 737 using CFM only. An AA chapter on the Boeing campus is newly established for its Max executives.

CFM believes in the "Technological Fix Syndrome" (TFS) for all problems. The TFS does not work if all assumptions are flushed by the 5% shortfall. It cannot go back and start over from five years ago when it started the new CFM design implementations. It has a serious TFS issues, as it cannot invent its way out of the fix at this time. It must take the PIP pill once a month, by determining what it can improve within the hand it dealt itself. I must assume the 5% performance shortfall represents its base 1B engine even after considerable tweaking making its optimal performance level before any PIP changes are made.

The problem with PIP world is you have the base design to improve and not the whole of a fresh start. Making a pig fly only has some much it can improve upon within the constraints of a frozen design. Making a 5% performance recovery considers engineering Trickeration on an already improved design. In the meantime, the front office is searching for the team that said this engine is so good it could perform 5% better than what it just showed! Boeing bought it and now they are far out on the MAX limb spinning new assurances in area of billions and billions of dollars.

The answer is obvious, you are stuck Boeing, and CFM will have H*** to pay if they can't correct course.

You may ask how can Airbus with its CFM 1A get a 2% improvement compared with the Boeing version of a 5% shortfall. This part answer is found in the engine cowling and opening. The Airbus version is bigger at 71" across where the Boeing low ground clearance is a 61" opening. The larger the openings, the better the efficiency metrics are, as a general rule. The 777X will have the largest of all engine diameters.  The Boeing 737 MAX did not stretch its landing gears taller due to in aircraft body space availability. This would be a major setback to the MAX project if they did so at the beginning, when they recognized a need for a few more inches of landing gear space for a taller landing stance. It would have accommodated a larger circumference engine cowling, and so forth. A larger engine opening would gain fuel burn performance.

The 737 Max sticking to engineering theme of compressing the body design, has reached a Max barrier of Body and Engine trade-off with its new CFM 1B engine currently on the test block. The engine needs help from Boeing design influences in order to Maximize the overall 737 MAX affect. The 800 pound Gorilla is not weight, it is specification within the concept of not having a larger engine opening in a single aisle class. CFM must now cram in a better performing engine, contained in a smaller space, by using adjunct engine PIPs. Just because they said they could do it at the outset, Boeing is calling them out to do it! Boeing is stressed.


Sunday, April 5, 2015

787 Order Book Churning Period Has Begun

Below is a chart of completed 787-8 orders. They represent Boeing sales opportunity for churning out new orders. As this list grows from Boeing's delivery pace of 120 more 787's delivered in 2015. Taking care of  Boeing's potential reorder customers is an important consideration in its sales effort with follow-on 787's sales in the next round. Hainan was on my short list originally, but they closed a deal for some 30 787-9's after its 10th 787-8 delivery. This is the best example of sales churning for making this point after an empty 787 order books. Hainan ordered 10 787-8's and received 10 787-8's. Now they have eagerly added 30 787-9's to its growth plans. With this in place as a sales engine, the following airlines should expand its purchases of more 787's.

Well positioned and empty 787 order books needing some churning in a basic A-B-C approach.
  • Aeromexico
  • British Airways
  • China Southern
  • Ethiopian 
All four enjoy the benefits of the 787 in operation. They all have a need for the 787-9 or 787-10 and are prepositioned in its relative markets or regions for an advantageous 787 follow-on purchase. Having China Southern follow suit as Hainan has just completed its purchase with Boeing, would be a strong move for China Southern. As it keeps pace with its regional competitor. Aeromexico has both a leased and purchased 787-8 fleet and it could lease 787-9's. Getting on  a 787-9 delivery queue sooner would make Aeromexico a strong Latin competitor with LAN and as it goes for European destinations. Finally, Ethiopian sees the importance of the Dreamliner effect and how it has changed its fortune. The 787-9 was  made for beyond Africa and the 787-10 is Africa.

British Airways has already placed orders for 22 787-9's and 12 787-10's at its disposal. It also has set aside for 18 A350-1000 with equal number of options. Boeing does not stand still on its order book and BA is a critical part of making a point, of who has the best aircraft? Since the 787-9 has not begun to deliver for BA it stands to reason the Boeing Sales team must offer information on what the 787-9 is doing in service with its other customers. It is known as the public information on profit and loss filings. Not much is written about the BA eight in number 787-8's in service, but it is important noting silence is a good thing when an aircraft starts operating.

All Things 787.blog  Chart (Uresh Seth)

Customer Name Customer Code Model Ordered Delivered Undelivered
Aeromexico AMX 787-8 2 2 0
Azerbaijan Airlines AHY 787-8 2 2 0
British Airways BAB 787-8 8 8 0
China Southern Airlines GUN 787-8 10 10 0
Ethiopian Airlines ETH 787-8 10 10 0
Hainan Airlines HNA 787-8 10 10 0
Korean Air KAL 787-8 1 1 0
United Air Lines UAL/CAL 787-8 12 12 0