Leeham News and Analysis
There's more to real news than a news release.
There's more to real news than a news release.
Leeham News and Analysis
- Bjorn’s Corner: New engine development. Part 4. Propulsive efficiency April 19, 2024
- Boeing unlikely to meet FAA’s 90-day deadline for new safety program April 18, 2024
- Focus on quality not slowing innovation, says GKN April 18, 2024
- Boeing defends 787, 777 against whistleblower charges April 17, 2024
- Dissecting Boeing CEO’s statement next new airplane will cost $50bn April 15, 2024
Boeing: new delay, charge in 747 program
Boeing announced a new delay and a new $1bn charge in its 747-8 program.
First flight has moved from 4Q09 (November) to 1Q10 (probably mid-quarter), or about five months; first delivery of the freighter has moved from 3Q10 (July or August) to 4Q10 (probably very late).
Boeing was very general as to the causes; here is the full press release.
Dang. This one hurts mostly because even with my increasing cynicism, I failed to see it coming totally.
“Because the 747 program is in a loss position….”
OW!
You know, I’m beginning to understand BA’s CEO.
The Board however, I have no idea what their function is anymore.
Reading between the lines, I suspect customers are deferring their deliveries. Boeing aren’t going to bust a gut and incur unnecessary expense just to create white tail planes.
So the 787 is late because they can’t get the design sorted out. The 747-8 is late because nobody wants it right now. …Which is even worse.
Good call, FF2. There was no mention of potential liabilities for late payments in the Boeing release.
Also, Boeing recently created a second flight test program office so that Boeing could flight test the 787 and the 747-8 simultaneously, instead of serially as originally envisioned. Those costs must be part of this charge.
The more I think about this, the more outraged I become.
To fuel that outrage, I only need look at very recent statements and articals:
“Program chief Mohammad “Mo” Yahyavi says he aims to have not one but all three of the test-flight 747-8s flying by the end of the year. The three planes will be finished 20 workdays apart, so the first needs to fly by early November to meet his timetable.”
http://seattletimes.nwsource.com/html/boeingaerospace/2009866995_boeing15.html
So, did Mo deliberatly mislead Dominic Gates? Sure seems so. I just don’t see how you go from flying three to flying zero within a few short weeks. How can you be so wrong?
Look, there can ONLY BE 2 possiblities at this point.
A. The Boeing brass deliberatly intended to mislead, but thet suddenly realised they weren’t going to be able to keep up the charade past the q-3 conferance call or…
B. There is some sort of serious technical issue with the -8F.
It also reenforces my opinion that the guy they put in charge of the program was in over his head from the start, and that you can’t pull a guy from producing a military derivative of a thirty year old design of a narrow body twin, BA’s smallest jet, and drop him into a major refresh of Boeing’s largest 4 engine transport, and expect success. This alone is not Mo’s fault, but shows that Boeing is now so short on managerial talent that they will grab ahold of anybody who has had any sort of success and throw him to the lions. The peter principal in action.
One only need go back to this:
http://boeingblogs.com/randy/archives/2009/09/hang_on.html
“We’re on target for a first flight for the 747-8 Freighter in the fourth quarter of this year. So hang on, it’s going to be a great ride.”
I’m changing your name to Randy Tout-seth Randy. Less than five weeks have elapsed since you made that statement, and we are expected to beieve that in that time, a delay of at least two and a half months suddenly came up out of nowhere? ( I consider that 2.5 month delay figure extreemly optimistic and over simplified).
The only ride being taken is by the shareholders here Randy. The company is completely broken. Your internal communications, especially upward are on the fritz. Your schedual performance stinks. Your ability to forcast stinks worse. And there is nary a sign anywhere that things will improve.
Exactly my thoughts… If Boeing says something, you know that precisely the opposite is going to happen. Next they will be telling us 787 will fly this year… 🙂
Ah, the bastion of Boeing-bashing, never fails to disappoint, huh guys?
The 747-8 program has one major handicap.
It does not fit market needs.
As far as I know, there is only one customer for the 747-8i passenger version (Lufthansa) with about 20 airplanes ordered (down from 27).
A little bit better is the 747-8F freight version situated with about 78 aircraft on order. The most important customers are:
Boeing 747-8F airplanes (10+10) ordered by CargoLux, 10 items
Boeing 747-8Fs (4+2) worth $1.12 billion ordered by Guggenheim Aviation Partners, LLC, 4 items.
Boeing 747-8Fs worth $3.4 billion ordered by Atlas Air Worldwide Holdings, 12 items.
Boeing 747-8Fs powered by GEnx ordered by Emirates SkyCargo, 10 items.
Boeing 747-8F airplanes (8+6) operator Nippon Cargo Airlines, 8 items.
Back in March, there was already forward loss on the 747-8 program of about $600 million and a delay of half a year was announced.
Today we have another forward loss of $1 billion and again a delay.
I’m sorry to say, but I heavily doubt wether Boeing ever will be able to earn money with this program.
Especially if there should happen the same effect as with the first 10 787 dreamliners, which cannot be sold, as none wants to buy them due to their wing patches.