Boeing delivers first 787 to ANA

In a packed room of international media, Boeing announced Sunday that All Nippon Airways executed the contract to accept first delivery of the 787, three and one half years late.

Boeing has a day-long schedule for the media to get briefed on the program and the handover. Ceremonies continue tomorrow and the plane leaves Tuesday for Tokyo.

ANA will take four airplanes this year and 16 next year. By the end of ANA’s fiscal 2017 in March 2013an 2017 (oops-big thumbs on a small Blackberry keyboard) it will receive all 55 on order.

ANA’s airplanes are powered by the Rolls Royce Trent 1000, designed exclusively for the 787.

This is a milestone for Boeing but challenges remain.

The Seattle Times has this report, estimating that Boeing has spent $32bn so far on the 787 program vs a planned $5.8bn.

Challenges Remain

Production ramp up will be a challenge and so will delivery rework. We’ll have further reports over the next two days.

18 Comments on “Boeing delivers first 787 to ANA

  1. That plane is breaking all financials records!

    Let’s hope it will finally be a good money maker for the customers so that Boeing can survive this…

  2. Well, outsourcing and “smart” decisions by the management (like, “oh, we will develop this airplane in 4 years” when it usually takes 7 years for a new bird) really “helped” to decrease the costs. Imho, tech companies should be run by tech people who know how to design/develop/build stuff and comprehend the fact that there are limitations caused by physics laws.

    As Dogbert would say, “Never question an engineer’s opinion”.

    At least, I hope that 787 will finally be a successful program and provide the platform for building future airplanes.

  3. $32 billion! That’s a staggering number. Not long ago several experts were estimating the 787 development costs to be anywhere between 12 and 20 billion. This new figure makes it possibly even worst. A lot worst in fact. The TST article also suggests that Boeing will never make money on the project. Well, I am not sure about that. But let say it was true. What would then be the consequences for Boeing?

    If we consider the 747-8 development costs and it’s even lower probability of recovering those costs, we end up with a pretty bleak situation. Even if the 737 is a highly profitable program, some of the cash it generates will be spent on the MAX. And it’s the same thing for the 777: Some of the cash it generates will be used to absorb the even higher projected development costs of a modernized version.

    Eventually this will show up on the balance sheet. So far the annual reports have been impressive, but it now appears more and more evident that the future will not be as rosy.

    • The reports look good because most expenses have been pushed into “parked value” positions even though they don’t represent recoverable value.
      Pretty (and) innovative bookkeeping.
      Now the 747-8 may probably be deemed cheap at just $4+b.

      Nonetheless: Actually delivering the first frame and a potential EIS in the next
      weeks is a turn towards better things to come.

  4. ANA will take four airplanes this year and 16 next year. By the end of ANA’s fiscal 2012 in March 2013an it will receive all 55 on order.

    So, Boeing will deliver 35 787s to ANA during the first three months of 2013? 😉

    Are you sure they didn’t say March 2014 (or, later)?

  5. Well, better late (even if it is 3.5 years) than never… It is a milestone for Boeing and ANA but many challenges remain.

  6. For this moment, Boeing deserves congratulations;they have paid enough in terms of credibility, pride and value for the fumbles and challenges. Well done Boeing, you have made a breakthru plane with new material, new systems and architecture.
    This set of tech stuff will help Boeing for the long term as Scott Francher said ;they have to now get the production systems going ,esp the ramp up , with new models to follow.
    The key is the set of learning from what went wrong in the planning and supply chain and how to leverage it for the future programs esp the narrow body and 77 advanced.

    • Ahh yes, it’s the word fiscal… Still there is nothing better than to put a hard date on it 🙂

      • 72 – 69 = 3 month or 4% difference ( reference would be ~42 month current delays ) 3 month just is not significant.

  7. A good part of that investment ($12.7 billion) is in existing stock/inventory (partially building 40 planes that are going to be delivered). Therefore I wouldn’t see this as a negative other than as a drag on cash flow until they are delivered. Hence the real development costs seem to be around the $20 to 21 billion mark. Still a hefty number.

    But have I calculated this correctly (I get that to be $317.5 million per airframe)? That seem to be alot, doesn’t it? Especially considering that the list price for an 787-8 is $185.2 million?
    I know one cannot use it as a precise calculation but theoretically the $12.7 billion expenditure is supposed to be for 40 (partially completed) airframes, not including the first 3 test aircraft, and excluding tooling and so forth.

    The significant questions, which I assume none of us will ever really know the answers to, are how much are they going to make on each plane they sell (especially the first 400 or so that were supposedly sold at slim to no margins) and what are the cash equivalents to the penalties for late delivery and performance? Another question is if someone else will do a Cargolux and refuse delivery? Now that that barrier has been broken, it is not impossible that it could happen again?

    I also wonder how well this MRO plan will work out for Boeing. If all goes according to plan, they could reap a nice windfall on this GoldCare MRO programme, but if things don’t, this could be a further heavy anchor and chain around Boeing’sd neck.

    It’s nice that they finally got the first one delivered and that is a great burden to be relieved of, but they still have a long way to go before things will look totally rosy again.

    Sorry Scott, but I cannot sugar coat it.

    • All right, some fo my questions were answered further into the article. It would be smarter to read the whole thing first before commenting.


    • We had this guessing game going before when Boeing anounced $19++b accumulated
      inventory for the Dreamliner project. No engines and they will probably only get an average of $76m for the first 400 -8 frames ( see flightbloggers research ?a year? ago )
      40 “complete” frames @ $76m ~= $3b potential revenue from selling (parts of that) inventory.

      Knowing what Boeing actually tags as inventory would be really enlightening.
      ( The investments for buying out partners doesn’t count as inventory, right? )

  8. This is a great milestone for Boeing and NH to reach. It has been a to long and to bumpy road to get to this point. But as said by others have said, getting a profit position on the B-787 progam, as a whole, will be one of the bigger challanges remaining. Boeing has to climb the production learning curve, and do it as fast as they can do it successfully and without additional self inflicted problems. The B-787 also has to meet its performance goals, or exceed them very quickly. If they do, and we face yet another massive fuel price increase, then Boeing will be able to sell the B-787 much faster than it has in recent years.

    • It is a great milestone indeed and everyone has a sense of relief. But the 787 is now entering a crucial period of it’s development: real-life validation of the extensive flight testing of the last couple of years.

      The Dreamliner is a bold design that encompasses a great deal of innovations never used before in an airliner. Composite fuselage is the most obvious But the all-electric concept is in my opinion the most audacious. The ultimate validation of the technical choices that were made earlier will be the in-service reliability record and real-life efficiency of the technology.

      Frankly I don’t know what to expect. On the 787 the engineers left behind well proven hydraulic and pneumatic technologies for an all-or-nothing electrification effort. Even Airbus, traditionally at the avant-garde in terms of innovation, is shying away from the all-elctric architecture.

      When I think about the whole 787 endeavour the word that most often comes to my mind is “risky”. Vision or recklessness? Audacity or imprudence? Success or failure? The ultimate test will be the test of time.

  9. I cannot disagree with you, Normand.

    The B-787 does have bold new features that can, if successful, take airliner design and developement up to the next level. The B-787 was designed with the pilot, flight attendents, passengers, and maintaners in mind. Lowering the cabin altitude from 8,000′ to 6,000′ will prove to be a hugh benefit in passenger and crew comfort. The smaller touches, like the electronic window shading will be impressive to the pax, too.

    The down side of the B-787, to maintaners is it will eliminate those who’s specialty is in hydraulics, esspecially if future airplane designs from both OEMs follow the all electric architecture. That is a real possibility if the all electric is successful.

    But only the future will tell if Boeing’s bold steps are as successful as the B-707 was introducing jet airliners and the B-747 was introducing the wide body airliner.

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