Faites Vos Jeux M'sieurs, Dames!

Place your bets.

We have a pool going at the moment on the date of the 787 flight. Given that the invites have gone out from Boeing, rooms around Everett (particularly at the Hilton Garden Inn right there) are fully booked out for the nights of Dec 14 and 15 - you can be pretty sure that this is going to happen.

Just in case you are a betting person for to Paddy's for a quote.

And my nomination... December 21st. Will this be the first time the Professor is actually late rather than early?

Cheers

Boeing to Scrap first three 787 prototypes

Part of the grand plan with the 787 program was that the development aircraft would be refurbished and put out into the passenger fleet.

It seems that Boeing has had to scrap that idea and indeed it has a $2.5 Billion (in a non cash charge) to write off the first 3 test examples which are not possible to be returned to the pax fleet. Boeing describes the situation that these aircraft are not commercially marketable due to "extensive modification work".

Let's hope that these aircraft don't end up on the scrap heap like these fellows here. I am sure that the Museum of Flight and the Smithsonian Museum will want them

787 - I will be watching VERY carefully which plane I fly

So let's assume that the 787 program will now go smoothly - as we have seen that's a big - very big - assumption. But humour me here for a moment.

Reading FlightBlogger's post on the production schedule it confirms the beliefs that I have harboured for some time.

1. The prototype will be pretty far from the production standard.
2. The early models will have gone through several modifications.

The first one is to be expected.

However the process of modifying the early production aircraft is somewhat drastic. As there are a lot of unknowns in the design and process of Boeing's new integrated supply chain this represents a sea change of activity ranging from the material (composite vs metal) to the production process (disparate vs all in the same place). As Boeing has frequently admitted this was not their finest hour and they still have to get the supply chain monster under control.

I realize that all aircraft are somewhat wonders of integration that get them into the air in the first place. However the element that causes me so much concern is that from the gitgo the process was designed to lead to a high volume production rate with little thought (in my opinion) to the process of incorporating changes. If you want an example of how spectacularly that could fail look no further than the now defunct Eclipse Aviation.

Bottom line for me - I will be avoiding flying on ANA and other early adopters of the 787. I shall be watching for aircraft tail numbers tied into MSN numbers before boarding a 787 commercially. However I wish everyone success in this project. Just let me not be the guinea pig.

Cheers

Any Bets On How Many More Times Boeing Will have to Re-Build 787 Prototypes ZA001 to 003?

Today's absolutely best quote comes from Flightblogger on Tweetdeck.

Flightblogger Tweeting (lord help me for reading Twitter) from the Morgan Stanley Investment Conference was listening in to Boeing's CEO describing the current status of the 787 development:

McNerney on ZA001-ZA003: "We've built a couple of the airplanes four or five times."

'Nuff said Squire!

So I guess they have one more to go before take off... but don't count those chickens. Jim has already replaced Scott - and for sure he is going to be looking not to make the same mistakes of his predecessor(s). Remember the schedule was not his... so he still has a spare life to call another delay.

Cheers

Don't Panic Seattle (Yet!) Boeing and the Second Line

There has been much speculation on the reasons for the Boeing purchase of the 787 Aft fuselage fabrication facility in South Carolina. Before anyone rushes to conclusion - chill out a moment.

It should be remembered that Boeing's grand plan for this Automotive style Just-in Time production process for the 787 was deeply flawed. The 787 is not a Smart Car. (Although at this rate it could end up being a bit of an expensive proposition tying down Boeing as Smart has Mercedes). It is a very complex and highly sophisticated integrated system. The plan to outsource technology and essentially risk to partners all over the world and to essentially out Airbus Airbus has not worked. Boeing will not make the same mistake again.

So Boeing has been quietly bringing back all the services in-house and taking direct control of the major subsystems assembly and indeed the design. With so many problems with the project related to a lack of control - ultimately the fault lies with Boeing. It was too ambitious and too complex. Couple this with a corporate culture that was based on a certain degree of elitism and voila - with the benefit of hindsight it didn't work.

However one must applaud Boeing for recognizing the error of its ways. What one cannot be in admiration of has been how the spin has oozed out of Boeing on the 787 transformation.

Using the threat of the so called second line move to another location outside of Washington State has the politicians all up in a tizzy. Chill people!

For Boeing to move and manage 2 separate production lines given the less than stellar performance in getting just the first plane built does not bode well for the company and its long term stock performance. It also is a bit of a smoke screen to move attention away from Boeing's performance on the project so far.

However the Unions must share a certain level of responsibility in making the project work. So far they have acted responsibly and Boeing should at the very least acknowledge this. Should the Unions start to agitate in the next 24 months - then all they are doing is playing to Boeing's game.

And that's the Professor's opinion. What's yours?

The Not Quite So Strange Case of Qantas

The Professor is currently on a round the world roadshow trip for one of our clients. In doing so - I have been engaging in a social experiment of doing the entire trip in coach. As I chose BA/QF's low RTW fare - I am experiencing the joys of coach travel much of it on Qantas.

Qantas is an airline in transition. It is moving from a pure legacy carrier and under Joyce aiming to remake its future as a feisty HVC - Hybrid Value Carrier. Let me assure you there are no sacred cows anywhere inside Qantas now (perhaps a sacred 'Roo though!!!)

The business strategy under the Dixon era regime seemed to be almost Microsoft like - Embrace and Extend. Betting on the ability to support multiple brands and multiple business models shoring up the uber Brand.

The new guy - another Irishman - Joyce seems to have understood that the GFC is not going to let that model be sustained. So he has started the arduous process of remaking the airline from the inside out. Bringing with him some of his key Lieutenants from Jetstar - he is determined to lower the cost base and at the same time to enhance the organization to adopt new thinking. This type of behavior would not be possible under the old regime - it is still not without risk given the testy nature of the relations with the Unions. Australian Labour relations are not the easiest to deal with. So delicate would be the description of the negotiations that have to be undertaken. But we can expect to see a brighter smarter definitely more agile QF.

The corridors in Mascott (QF's HQ area) are getting more like ghost towns. Whole departments have been axed or merged. Gardening leave has been ordered for many. Indeed outsourcing the IT area to IBM will put many of that team out to grass for a long time.

Joyce is not mincing any words or so his actions are demonstrating. He is determined to make the mainline airline viable in the face of low cost competition and encroachment from external sources. The traditional battle for maintaining the status quo - and thus ensuring QF's protected position seem to be regarded as lost. Now the airline must compete on its product and conventional market tools. The last vestige of the Flying Kangeroo as a matter of public pride and therefore worthy of public protection has vanished. It can only be a matter of time before the Pacific really opens up. Contrast this with the debate over a possible bail out of BA in the UK.

So QF's protected world is now open. The threats come from local (Virgin Australia group with its 4 airlines), Traditional advisaries - SQ and CX etc, The occassional foray into the Oz market by the US airlines - Delta being the latest one this month to start the service. But perhaps one of the most threatening is the encroachment by the GCC airlines - Qatar, Etihad and of course Emirates that has seen that airline rise to being a major carrier on the Trans Tasman routes.

Today's news shows that QF is now not prepared to tolerate Boeing's BS on the 787. Cancelling part of the 787 order is a major psycholigical blow to the program. Nothing earth threatening but definitely a kick in the teeth. Given the severity of the problem in the 787 program - they are looking at a significant additional delay in deliveries to the early customers. Scuttlebutt says that the redesign could add many many months of delay to the program. This puts another issue BACK on the table with the weight/performance. QF was hoping for the ability to operate SYD-LHR nonstop. That is not going to be on the cards for a while in my opinion.

So watch out world. If Joyce gets his way - QF will emerge from the current crisis a much better animal.

Cheers

The Prize For Bravery Goes to ANA....... First to Fly 787s

In a bid to outdo its competition - ANA has managed to steel a march on both its local competition and probably many different players as well. ANA is braving the flack and commercial risks by agreeing to take most of the first 11 aircraft off the line. I clearly don't think this is hubris and it could turn out to be a very smart move. Given the amount of compensation that Boeing is going to have to pay everyone for the late deliveries - this could also actually increase the cost for Boeing.

Of course we don't know at the moment what the likely performance is of the initial aircraft whether they will be -8s or -3s. I suspect they will be -8s.

There are a few others mixed in. DL has pushed its first aircraft out and ceded a delivery spot to AI. Co I think gets ship #7. It also looks like most of these will be new builds rather than refurbs. Boeing will quietly use the first few aircraft as demonstrators or have an extensive "test" fleet program which will likely not see the initial aircraft going back into commercial operation - at least for quite some time.

it also means that the ramp up delivery schedule is going to be pretty light. Punters are betting on a Pre June 30th (I am not saying which year) first flight. Personally I am still thinking its going to slip still into Q3 (or is that actually Q8 ;-)

An interesting aside here is to consider the dynamics of the order books in Japan. Airbus has been pinning a lot on ANA being the Japanese customer for the A380. As they operating experience with an Airbus type. With JAL's commercials now a lot more stable - this may create on opportunity for Super Salesman John to persuade JAL to take the Airbus jumbo. We shall see.

Cheers

So 787 Ship ZA01 actually took another little trip

Here is a nice picture of said Prototype courtesy of flight.

http://www.flightglobal.com/blogs/flightblogger/assets_c/2009/01/kpae4515.html

Cheers

Timothy

Oh The 787 Fastener Problem...

Many moons ago a man named Patterson developed the flush rivet. This was a smooth rivet head that allowed a smooth skin of metal on an Aircraft. The original rivets on early metal planes (like Lindy's Ryan Monoplane) were raised which of course created drag. So the advanced form of flush rivet meant a smooth flow of air on the skin of an aircraft - whether stressed or not.

Pretty much this has been state of the art since the time of the DC2.

However now we are at the 787 and we seem (or rather Boeing does) to have a problem with the fasteners.

This is basic stuff. For Boeing to get it wrong and to incorrectly fit 3% on the first 4 airframes on the 787 line is a pretty poor showing of Boeing's Quality Management Process. Something that in the past they have been renowned for. BUT and this is a big one - we don't know what this does to the strength of the carbon filament structure. But for anyone who has ever had to remove a nail, bolt or try to undo a fastener of any sort - one thing is for certain - the surrounding structure is always left worse off than before.

Given all the going's on with Ship 1 - you can almost be sure that this aircraft is now a pure engineering model with little relationship to the production ships.

Most of today's news reports that there is no chance of a 2008 first flight. And the chances of any production deliveries in 2009 are now looking pretty remote.

I will say now what I have said before. I would not feel very comfortable flying in the first models of the 787. Boeing would do well to come clean on the whole issue and basically throw away many of these early model fuselages and wait till they get it right in the later runs.

Much has been written about Boeing's admiration for Toyota's process and quality. Indeed I have even hear Boeing personnel point to the Eclipse Aviation as an example of a production focused business. Aircraft are not cars. Boeing needs to go back and take stock of what has gone wrong. They should not be afraid to throw away the first airframes in favor of a new batch. At this point it would seem prudent to keep correcting things at the fundamental level rather than by bandaiding them again.

Just my humble opinion

Cheers

Uh Oh - 787 to slip again

So its back to the old routine. Despite stringent denials - the 787 program is going to slip again. This time insiders are saying its just a variety of things rather than anything major. Probably prudence all round.

Of course a strike could slow things up even further. Right now a slow down in deliveries worldwide by both Boeing and Airbus would probably be welcomed. At lease by the desert where so many planes have been headed this week

Cheers

Etihad splits Giant Order - nod to Airbus

Etihad has split its expected giant order between the leading players.

Airbus gets the nod with 20 A320s, 25 A350s and 10 A380s. Boeing gets hardly the consolation prize with a good order of its own for 35 787s and 10 777s.

Not bad guys... I guess Etihad doesn't have to worry about the cash flow in this picture.

PS sorry for the typos (July 19)

Oops Did Someone Drill the Wrong Hole on Fuselage #4

Boeing has announced that there is a slight problem with Prototype #4 of the 787 program. Apparently there is a small issue with them having to "repair" the fuselage at the Alenia factory in South Carolina.

Good practice for someone... but kinda scary that this sort of thing can happen. Shows that Boeing still has some work ahead of it to get the Supply Chain System running right

Cheers

Timothy

Its Official - 787 is delayed

They speak in quarters but the truth is - its at least a 6 month delay.

First deliveries are now scheduled for the end of 2009. Symbolically Boeing will try and meet that date.

There will be a lot of unhappy people today who will be lining up outside the Boeing Company's Treasure's door.

Let's hope this comes good now. Realistically the ramp up - as in my note from yesterday will be much slower.

Cheers

Timothy

Boeing's Troubles with 787 Continue. This time its the Wing Box

This is one of those Oh Shit moments.

Boeing’s efforts to save weight on the 787 has resulted in a weakened central wing box, this is the core bit of the aircraft which effectively anchors the whole airplane.

First revealed in Public by ILFC’s Chairman Steven F. Udvar-Hazy
At the JPMorganChase Transportation Conference this week in his keynote speech and reported by Jon Osterow in the FlightBlogger this week the issue of a weakened wing box on the 787 was revealed. Most certainly this means a significant delay. Don’t believe that for a minute this is not a serious issue. It is and rightly Boeing is doing a lot to address it.

The impact will be significant on the production line with delays again not just in the first flight but also in the delivery schedule. Effectively we are now looking at a 2 year delay for Boeing to start deliveries from the pronouncements even last year at roll out day 7-8-07. For the early aircraft and the subsequent production line the impact on weight will be significant. Boeing’s hopes of a lighter 787 within spec have now been dashed. As with all aircraft this will have an effect either in range, lifting capacity or both. Having to strengthen the wing box means that the first aircraft off the line will be range constrained due to less fuel capacity. This is probably only a few percentage points but in the fine tuning of the aircraft it is something to watch. Hazy and many other purchasers are now setting their bean counters to calculate how much compensation is coming their way.

Sadly the work on the wing box was one of the brighter spots in the program. The Japanese have been scrupulously working to achieve all the goals that Boeing set them. I say again Boeing. PLEASE take the time to identify the issues and work them through. Boeing’s retreat into silence is a marked turnaround from their original open and transparent dialogue with the marketplace. Suggestion. Start holding regular briefings so people can know what is going on. Learn to manage not stifle the news.

Cheers

Timothy

For True Airline Geeks Only

Want to hear the absolute latest spin on the US Airline Industry. Then go to this website and try and drink from the fire-hose of the JPMorgan Chase (and now Bear Sterns) Conference on the Transportation Industry the majority of which is airline related. It covers presentations held over 2 days.

However hurry because there are limitations on these - some expire in a few days all expire by June 23 2008.

Sadly you will miss Hazy's speech where he lays into Boeing about the 787 delays.

Wide ranging reports - 787 Delayed again - implications

Sadly as we have reported frequently here, the 787 is running late again. The project is still not hitting its milestones. While Boeing was quietly crowing last year when the full extent of the A380 delays became apparent and insisting that there aggressive time line was solid, it now becomes clear that this was off base.

So I will reiterate our position on the situation with the 787. It will take years to bring the project to full production run rate. Our estimate is that this will not occur until well into 2010 possibly even later. The issues yet to be resolved are numerous and complex. Even after they are solved turning the solutions into a viable production line with smooth processes is far from being assured. Boeing is very fortunate in that after the design issues are resolved they have a cadre of execs who have solid moving production line experience who came from Toyota and Ford etc. But the hump to get over is/will continue to be a big/long one. We will continue to monitor the situation and hope to report some estimates on impact later.

Lest it seem that we are beating up on Boeing alone, let me just say that these are issues that will face Airbus in much the same way with the A350. Unlike Boeing with a single current project to worry about - Airbus has 4. The A380, The A330 Tanker/Military, The A350XWB and do not forget the A400M which is a pretty sick project at the moment.

I say again...

Take the time and its actually OK to add fudge factor to the overall project. Take a deep breath and really think hard. For Boeing - you have one more chance for a schedule correction. Get it right this time. For Airbus - learn and don't get too aggressive with the schedules. For the suppliers - you have two years of missed schedules and delivery lines. Spirit in KS will be particularly vulnerable having a strong dependence on Boeing.

21 787s now in assembly in Everett... when will we see the first one fly?

They are still burning the midnight oil in Everett.

Formally Aircraft number 2 is in final assembly. See here for an image released Feb 15th. http://boeingmedia.com/imageDetail.cfm?id=15106&clr=release. Altogether there are 4 ships on the line.

Contrast this with the image released earlier showing the first aircraft Ship #1 and the 2 static test aircraft. LN2 now joins them.
Since this one was widely circulated earlier - I am going to risk the wrath of Boeing and reprint it here.

Altogether there are 21 aircraft (mostly in pieces out of sight of both these photos) now in Everett. Four are now officially on the line itself. Still it has been a mild winter so far so not much chance of any weather related problems with the aircraft.

The prognosis is getting better but things are still not looking rosy for the schedule. Despite several statements from Carson and Co, it really doesn't look good for 109 Aircraft delivered by end of 2009. The biggest problem will be full certification. To all intents and purposes the LN1 (First aircraft) is not really a representative sample of the aircraft. While the design in now "100%" complete there is a lot of work to be done to bring the current line delivered structures as well as parts in the supply chain already that will have to be re"travelled". Certification will be extremely tight. The biggest obstacle being the Cold Soak test. There is now just a short window every year when such a test can be accommodated. The consensus from what can see is that first flight will now slip into Q4. Delivery for May 09 to ANA looks reasonable if you are an optimist.

Boeing... do it right. Take the time. And best of luck to you

Boeing "Guarded" on 787 during earnings call

According to FlightGlobal's Flightblogger blog (what a mouthful!) who listened in on the earnings call today - James Mcnerny was "guarded" And so he should be.

The 787 has a significant way to go before they will be ready to even turn that puppy on. So at this point unlike this time last year when the Boeing team was effusing about how many they would deliver in the first year... pride comes before fall.

One thing to note will be how many of the 787s end up in San Antonio and have to be "reworked..."

At the moment they are saying about 25. However I have private bet how many ultimately end up there in some form or another. My bet is a significant number higher than this. Why? The pipeline of parts could be as high as 100 shipsets or parts thereof. These parts will either have to be reworked or new ones built. Many of these have very long lead times.

There is of course a piece of good news. The back end supply of the raw materials for composite components now has more time to ramp up. Lets just hope there has been enough testing of these materials as to how they will stand up to ramp rash and JFK baggage handlers.

Good Luck Boeing... of course if you hadn't relocated to Chicago none of this would have happened.................

So the 787 is going to be late....

That as your humble writer is not new news. But there are some subtle issues that Boeing has finally come clean about.

The biggest decision is to wait before making a decision on the production start up, ramp speed and full production dates.

The decision for production and setting a date is going to be much later - don't expect this until late Q3 at the earliest. Our betting is that first deliveries wont be until Q2 in 2009. We are projecting about 40-50 deliveries in the first year. Well below the 109 Boeing originally projected.

We are all going to see a much chastened Boeing for a while. They have yet to get things right. The issues now remain:

The supply chain is not yet ready. Already some of the supply chain partners are saying that they will not be able to meet Boeing's targets.

The design is "soft" frozen. Boeing doesn't as yet have a full set of plans to work with. If all the pieces had been delivered as envisaged then this would not have been too much of an issue in delivering Aircraft 1 for flight testing. However now Boeing has had to take back control of certain sections (remember the Italians!) they need the full documentation and guess what... they don't have it all... So the "Traveling Work" is both more complex and time consuming than was allowed for.

Oh yes and Rolls has a problem with Fuel burn. They are still 2%+ off targets.

At least Boeing is (kinda) coming clean on these issues. There are others. There is no clear path out of here. Let's hope Pat Shanahan and his crew are left alone to do their job. His 90 day honeymoon is well and truly over.

My admonishment is the same... take the time.

News Trickling out - 787 delays are more serious

The Wall Street Journal will publish an article tomorrow on the 787 delays. They are saying what we have been hearing for some time that the Q1 first flight is not going to happen with even an end of June a tough date.

Perhaps more telling is the longer term implications. IE what we have been saying for some time that the production schedule is still way too ambitious.

We believe a more prudent approach would be a slower ramp rate is advisable which would push full initial production to 2010. Boeing's stock wont like this but the plane will do better for it.

For early ship-sets this could have some serious implications.