Loading For More Dreamliners ?

Manufacturing intelligence is a key indicator for the overarching intent of the mega manufacturer such as Boeing. Spirit Aerosystems installation of a new autoclave signals a capability far exceeding the current backlog Boeing has for its 787 model. A sensible plan for Boeing is the preparation for a 2,000 unit 787 order book. The current unofficial units stands at 1,210 Dreamliners ordered, and having about 725 of its type remaining to be built as of this date.

Spirit Aerosystems is a large player in this effort, a key bellwether indicator for the program. If it expands, then Boeing planning has done its due diligence for estimating market growth. Here is what Engineering.com has written about signaling an expectation of 787 product growth as Spirit sinks millions into this project as it expects far more work than the 725 currently in backlog.

Engineering.com:

Spirit AeroSystems Autoclave

Spirit AeroSystems' new autoclave. (Image courtesy of Spirit AeroSystems.)

Spirit AeroSystems Inc. is installing one of the world's largest autoclaves at its Wichita, Kansas facility to support increasing production levels in the company's composite fuselage business and to grow overall composite production capability. The new autoclave has a 30-foot diameter and an internal volume of more than 78,000 cubic feet.

"Spirit continues to invest in our composite manufacturing capability and this latest expansion will help us meet record demand for the products we build," said Terry George, Spirit's vice president of the 787 program.

The autoclave, which is 120 feet long, is one of nearly 40 at Spirit's Wichita location. The addition is part of a 94,000 square-foot expansion to Spirit's Composite Fuselage Facility, where the company makes the carbon-fiber nose section for Boeing's 787 Dreamliner.

The Game Of Chicken Shakes Companies from United To Boeing

Once upon a time United ordered 61 of Boeing's 737-700 as an astounding validation for that type of aircraft. The 737-700 ripple hardly breached the beach until it did a 180 on its single aisle long order when talking Boeing into a side order from those same 737-700's making a 737 Max Cake. United played chicken, then blinked and reconfigured its order book and cash position in one announcement.

This time the world noticed the nuance. United had changed direction in its business model addressing its competitors like Delta and American Airlines that it would compete at a higher level of performance. It also deferred strained capital flows going into the next ten years. The five Billion ordered with Boeing and then deferred gets United into a stronger cash position going forward with much more precision from its perspective.

Precision is not by model selection but only in a strategic fashion over its competitors. No one knows how United will parley the deferral into its plans. Both the 737-Max-8's and Max-9's are in play coming from the 61 deferred 737-700's already booked. Production slots and cash flows were main objectives of United. They weren't ready to spring its trap on the competitors. 

Now the game is afoot wondering how and when all will come together, making it too late for the competition to respond in a timely manner. United will steal production spots as Airbus' is quagmire d in its own backlog. United calls chicken on its competitors and Boeing remains booked with different models once it is announces what it intends.

The change of heart was never intended by United to be "a real change of heart", only a feign, and now known as the play action fake hand-off turning into a long pass over its rivals. The how’s and why's of United's playbook while holding its closely held secrets even as its stocks took a dip by 1.8 percent of value today. 

The five billion deferral is a definite pivot by United, allowing Boeing a small production window opening as Boeing arranges its factory floor. Boeing no longer seems quite as swamped with orders as it once claimed when upping a production pace near 52 single aisle aircraft a month. Boeing will proceed as planned but with a little more slack to get it right. United will need its fleet replacement/renewal in the next five years while adjusting its business model. 

This play action pass by United, almost certainly will result in a preponderance of 737-8 Max ordered before all is considered and made finale.

United needs additional seats for expanding its market presence in the domestic arena. A paced delivery bodes well for United's capital position. The synergy between additional seats sold, upgraded customer satisfaction and efficient operations pushes United to the head of the class. However, holding five Billion in orders is too much at this time for United to swallow.

  

Winging It Is Hot Again

Last November 5, 2016 "Winging It" went dark until it successfully moved to its new location in Meridian, Id. All the nerves are now taking a rest. Fortunately for the blog nothing happened that should be reported or commented about from this perspective. Thank you all for your continued use of this blog. I can now return to the duty of writing and publishing opinions, ideas and news in the aviation world concerning Boeing and its adversaries. In addition there will be the occasional articles concerning big ships, submarines and military advances such as the F-35 and the Zumwalt class destroyer as examples. My favorite submarine is the Virginia class submarine boat and its vast technologies and arms.

In time of my "moving insanity", there came brief moments of rest and renewal. A president of the US was elected. I am not political only to the extent on how it affects our national defense. If president elect, Donald Trump can achieve even half of the military vision expressed during the campaign then there is plenty to write about.

The Chinese J-20 flew at its own air show and is purported to be fifth generation. By definition, fifth generation is a stealth aircraft, then China has one. Not to be outdone by the Chinese, the US F-35 goes to fused technology for its example of fifth generation for which China has not currently demonstrated. Fused technology is the intersection of all advanced systems and technological developments processed through one media center such as the F-35 invisible mach 1.6 flying computer. The combat circle of the F-35 is from space, the deep and across the world. China may have speed and stealth with its J-20, but may not have the American technology infused into air frame.

I hope all will enjoy the research and avionic digressions of Winging It going forward.

Announcement: Winging It Taking A Brief Break

The time has come to relocate operations for this blog. Long in the planning and long for the wait, but the time has come to relocate operations to another street address. 

The most important consideration is the move will disable the internet for up to two weeks and close off my contributions in that time period.

The second consideration: The blog was striving for contributing 1,000 blogs as a goal and this pause will interrupt that objective for 2016 causing Winging It to spill into 2017 after which more decisions are to be made going forward. If you have any ideas or criticisms please share them!

The third observation: is there are more than 966 blogs to read from during the next two weeks and I advise every reader to reference blogs predicting what the 787  will perform and what it has become today when comparing those predictions to outcomes. It’s your challenge to do so.

·      One is about Ryan Air

·      Another about the battery crises as examples.

Good luck and I'll see on the other side of the move!!! 

Airlines Searching For The "Seat Spot"

An Airline sets the seat count on a model of aircraft whether its single aisle or duo aisle. The first consideration is weighed well its about weight. A fully loaded aircraft with 17" across seats pack more sardine per cubic foot of cabin space. The ticket price is based on airline cost of both fixed and variable for each trip. The variable costing factor looks for a per unit or (seat) cost for any given trip going some distance. The longer the distance weight becomes a drain on its fuel capacity and distance traveled. The airline must determine seats sold and revenue obtained when sponsoring any given flight.

The airline madness begins with filling the airplane to max capacity and going the distance in the world market place. Variable costs would include fuel, operational services and in-flight support activities apportioned to ticket revenue. The fixed costs would include assets, staffing, and inventory acquisitions as exampled by this brief summary. Every ticket sold supports a contribution margin where the number of tickets sold with a certain price contributes towards reaching a break-even point and ultimately a profit for the airline. 

Cost accounting gives me a headache. Therefore computers come to the rescue with a liberal application of 17" wide seats having a 31" seat pitch. The term seat/mile refers to some variable costing indices. The airplane can fly so many miles with so many passengers weighing so much on a ticket configured for having some projected Beak-even point. An airplane holding a max 300 passengers could sell $200 dollar tickets and exceed break-even after the 133rd ticket is sold. However, if only 132 tickets are sold it would go into a loss position for that particular flight in this example. 

The unofficial example of Macro-costing for model 300 seats vs model 240 seats:

Fig 1.  comparing same model different passenger capacity.

FC=Fixed Costs
VC= Variable Costs
BE=Break-even point

The risk of going negative is often mitigated from ticket price or revenue required to fund a flight going its distance for the weight loaded. In a simple costing formula and a great deal of calculating from the accounting computer.  

The two examples above can factor in space additions without affecting the margin as it changes the variable costing element. A 300 seat 787-9 just crams in people where a more sensible 240 seat 787-9 makes a "big" difference in customer comfort on the long haul.

Successful Airlines run at a 80% Occupancy Rate.

• Model 1 is at 66% occupied.
• Model 2 is 83% occupied.

Here is the summary analysis:

·      The key component for this analysis is variable costing drops from $100 a unit to $80 dollars a unit from using less supplies, fuel and service for each passenger.

·      The second consideration no seat price has changed.

·      Seats sold no change

·      Fixed Costs no change

·      Break-even point in seats changes from 133 seats to 122, where having less passengers at maximum occupancy reduces operating costs and thus reduces the Break-even value. 

Airlines are now finding more room makes them more money than going for numbers at thin operating margins. Delta is configuring its airline for more convenience and space at the sacrifice of having more seats. Don't worry they will make a good deal of money hauling less passengers per airplane. The seat cramming paradigm has shifted to correctly configured aircraft. Boeing had this angle calculated long before it sold its first 787. However, the commercial customer couldn't resist overloading for more passengers now they are beginning to focus on value for its passenger customers.

Boeing's Military Division is Fraught With Risk and Reward Termoil

You don't have to look far until analyzing the Lockheed F-35 program before corporate America is adverse to the risk of winning a bid with the military. Building military equipment is impregnated with a whimsical Military objective. Build the "moon shot" for the military and hope a military fluid and dynamic condition won't impose a penalty on the contractor. The F-35 program did not reach a military satisfaction bench mark early on as the F-35 couldn't even fit an advanced technology helmet on its pilots without a major re-write of programs and capabilities.

Boeing, knowing that corporate investors would love to have a sure bet with military contracts are jumpy when the DoD does a 180 degree course change when it firms up a contract. They call for a stealthy war bird when in fact they are looking for an invisible aircraft after-all. The battle field has changed during the long and drawn out bid process which brings up another crucial point.

Will funding be voted upon during the different stages and maturation of a new military project? The US Congress weighs in on simplistic notions for gaining any sense about whether it should release more billions of dollars after a program reaches the rock and hard place point of development. The F-35 was just awarded the 9th block of 5th generation fighters with only having a 57 block grant from congress. Years in the discussion for the 9th and 10th block authorization has the Congress imposing its will of only awarding Block 9 and ignoring block 10. Lockheed is breathless over this imposition of award and that after the last two years working for a contract allotment of the F-35 next batches.

Boeing watches every little nuance between the military, congress and the awardee. Lockheed got smoked by politics when promised so much at the onset of the F-35 program. However, this is only a speed bump towards building 2,400 F-35 going forward. The 57 F-35's in Block 9 are low production rate aircraft as Lockheed fixes its “moon shot” technology along the trail of program completeness.

Boeing is out of the Moon Shot business for investor’s sake. It is taking a position during the remainder of this decade for mitigating any far reaching risk until program production pays for the last ten years of risk making from its commercial programs, hence a cautious approach on anything military until it can absorb more risk without damaging stock portfolios from around the world. Lockheed is the pilot hole for all military programs going forward. Timing, maybe right for Boeing to partner with either Northrup, Lockheed or itself for 6th generation fighter development on a large scale. Technology sharing is needed for 6th generation ideas.

Subcontracting with "others" can either increase or mitigate risk depending on program complexity. In fact partnering makes the mess too complex for a successful futuristic program unless new purchasing methods are used for conforming the product without inconsistent contribution of all players. Boeing will remain tepid on future military opportunity since the risk is too high for any military rewards obtained at this time.

Donghai Adds Five 787-9's To Boeing's Backlog.

Donghai Airlines has reached a culmination since the Paris Airshow initial commitments, by signing for twenty-five 737 8's and five 787-9's ordered. The culmination has come after several weeks ago when finalizing the 25 Max, and now today it has finalized the Dreamliners. The total 787 orders placed with Boeing 2016 now stands at sixty-six Dreamliners for the year.

ATW: 

China’s Donghai Airlines finalizes Boeing 787-9 order

The recent Dreamliner additions in October include 30 with Qatar, 12 with China Southern, and 5 with Donghai Airlines. The monthly total boosts Boeing's order book by 47 Dreamliners after only booking 19 Dreamliners in 2016 through the month of September. Boeing's Dreamliner booking is not done yet for 2016. There are several more pending orders yet to be booked such as Pakistan's order for eight and the ever looming Emirates order for a huge number. That alone may come in 2017 where Boeing will need to continue its wide body bookings going forward, hence the delay in 777 production decrease announcement, it is suspected that the order will come through and then extend current production levels as it will order a suite of wide bodies. It is rumored that Emirates may have a 100 aircraft order forming while listening to both Boeing and Airbus proposals. 

The Boeing Book may and could exceed over 100 Dreamliners booked in 2016, but it is more likely it will go sub 100 Dreamliners ordered for 2016 as it reaches into the mid Seventies range. Either way Boeing has established a solid order groundwork which will bear more order fruit for the program launching it into a 14 a month production pace in 2017. Reaching greater production levels will enable Boeing to maneuver adeptly in the market place and spurring on more wide body orders going forward. Boeing has demonstrated to customers, the Dreamliner is a complete program before the 787-10 makes its debut.

October 31, 2016 End Of Month

Program Summary Recap has some notable changes as the 787 order book for 2016 grew to 61 units ordered year to date. Also 117 Dreamliners have been delivered, as it is on pace for about 138 Dreamliners for the year.

Fig. 1

Further doodling analysis reflects a backlog shrinkage at a nominal number of -2 units against orders and delivery since 2011.

90 Day recap of 787 Delivery:

Boeing continues to exceed guidance after another 90 day period paces at almost 12 a month 787's projected goal. Boeing and should reach year ending guidance without pause.  

Fig. 2

Program strength is as follows:

Fig. 3

Program production dichotomy of production and by model.

Fig. 4

Program model in process and delivered production report.

Fig. 5  

Boeing 737 Proof Of Concept Comes After First Delivery

Boeing has a significant amount of work to do assuring the 737 Max is the rising star. After the Airbus A320 NEO debacle several of its important customers are less than happy about its NEO orders, when the roll out show its ugly teething woes. Boeing can recoup the single aisle market once its new single aisle 737 Max starts its commercial operations.  The engine will not fall short on the Max and the innovation treatments will not disappoint its customer base. Airbus already has muffed it with Qatar over its NEO program having a less than optimal engine performance metric during first delivery.

Airbus and its engine suppliers will get it right, but not in time for the Max’s run-out in the first half of 2017. A sign that Boeing has its collective head flying high above the problems below. The unknown customer having first receipt will in no doubt be excited happy, and may order more Boeing 737 Max's in turn.

The effort Airbus made offering multi engine options did not have a conclusive result, and it will pay in the market place for this mishap of engine performance. CFM has been building successful engines since the first 737 classic of almost forty years ago. The current iteration of the CFM designed just for the Max, but is included on the Airbus A320 NEO, is not same engine as the Boeing rendition fitting to the Max's low ground clearance profile.

The A320 could go larger in diameter on its CFM Leap 1-A rendition with 78 inches, and where the Boeing configured CFM Leap 1-B goes for 68.4 inches. The law of jet engine physics is the larger the diameter the better the jet engine performance.

The PW A320 gear driven motor hit an early snag as with all new concepts, but customers like Qatar don't want experimental equipment hanging on its business wings, hence the customer burn. Boeing has become a one trick pony with its CFM engine commitment during the history of the 737 program. Don't fix what works just make it better going forward. The Airbus Company striving to be all things to all customers has dabbled in the innovations realm and it has gained Boeing some valuable real estate back exampled by the recent commitment from Qatar for 60 Max. Qatar's word has always been good, so count one for Boeing in the last minutes of "Airplane Wars", Single Aisle Division.

The question now arises, what has Boeing and CFM wrought in the 68" configured Leap-1B. Heat was a great robber of engine performance and a larger diameter engine mitigates that heat as found in the Leap 1-A engine. However, the proprietary differences begin to mount up when mitigation those heat penalties that are attacking the Leap -1B. Boeing co-partnered with CFM on this one, as it refused to budge on the complete redesign of the 737 for bigger diameter engines. It maintained its airplane stance in the sand and made CFM Build an engine significantly smaller in diameter than the Leap 1-A.

But in doing so, CFM and Boeing had to bring rabbits out of the hat fixing the CFM 1-B while meeting industry performance requirements found with commercial aviation customers. Boeing contributed by bringing over from the 787 project key attributes enhancing the 68.4 limits. Boeing made changes to its engine nacelle coming from the 787 program, and added engine chevrons to its engine exhaust end for sound and aero-dynamics.

Placing the engine forward or backward on the wings would affect performance, so Boeing found the sweet spot for high engine performance and moved it to that spot. The plane balance is critical for flight control and efficiency and Boeing doubled down on engine balance for the aircraft.

 

Boeing also made some engine nacelle treatments different than the 737 NG configuration. A person notices when flying a kite that certain things need to be different after first flying attempts are made. It may dip, dive or fly upside down until the kite’s tail or sticks are adjusted. Boeing/CFM with its smaller engine manages the air passing by the wing and engine. They put on some fins in key places on the engine nacelle enhancing movement through the air, mitigating heat build-up, and canceling some drag.

Even though I do not know all the engine secrets, the Max in tests shows a 14% over-all improvement than previous models of its type. Boeing claims supremacy over the NEO. The customer will know who is correct in this argument. However, the important point is that Boeing can and should gain significant ground over Airbus A320-NEO in the market place once the 737 Max delivers, because then Boeing can demonstrate its tricked out 68.4 diameter engine as compared with the 78 inch Neo configured airplane currently in service.

Boeing's 747 Other Shoe Drops As UPS Wears It.

Boeing is having a fantastic fall festival of wide bodied orders. First there was Qatar for 30, 787's, then China Southern for another 12, 787's, and finally there is UPS for 14, 747-8F's. In all, the order book grew in October by 56 big bodies having almost a year's worth of production slots filled up, just from the month's worth of billions on Boeing's books.

Boeing's 747 jumbo snags a $5.3 billion lifeline from UPS:

Boeing's October Fest WB Order Totals