Boeing comments on 787 delamination, delivery expectations

Jim Albaugh, CEO of Boeing Commercial Airplanes, today commented on the delamination issues on the 787 and the effect on deliveries and production going forward. He spoke at a JP Morgan conference. there are several stories that can be found on Google News, but here’s a link to a Reuters piece that neatly sums things up. Here is a link to Aspire Aviation’s synopsis.

Among other things, Albaugh said Boeing should deliver 70-85 787s and 747-8s, roughly evenly split between the two, or about 35-42 of each airplane. Jon Ostrower also Tweeted that the plan is to deliver the last re-worked 787 in 2014. Some may recall that Boeing’s Scott Fancher, at the time the head of the 787 program (now heading up 777), once said it would take “years” to complete the rework on the plethora of 787s lined up at Everett’s Paine Field. Ostrower also Tweeted, quoting Albaugh, as saying the first “clean” 787 will be line #66 (it had been forecast to be #63).

The other key point is about the delamination. While this has gotten a lot of high-profile attention, particularly in the context of the overall 787 program difficulties, independent sources we checked with tell us that while this is another annoying and embarrassing event for Boeing, the fix in relatively simple and the problem not particularly consequential. Boeing, of course, has said as much but skeptics continue to question Boeing’s credibility due to the history of the program often turning out to be worse than Boeing’s statements. Case-in-point is Boeing’s continued insistence that it will meet the goal of producing 10 787s per month by the end of next year and the disbelief expressed by every aerospace analyst and consultant we’ve seen. (Granted, there may be some who accept the goal as doable, but we’ve not seen them.)

Separately, an interesting public dispute between Air India, a 787 customer, and Boeing emerged. Air India says Boeing agreed to pay $500m for delays of 27 787s. Albaugh says that’s news to him. We ask, what precisely did Air India say? The news reports are too ambiguous. Did Air India say cash compensation or that Boeing is paying $500m in compensation, which, of course, could take many forms such as discounts, services, parts, etc? This would make Albaugh’s statement that no check is being written correct. So it goes….

17 Comments on “Boeing comments on 787 delamination, delivery expectations

  1. “I see nothing to date that leads me to believe that we won’t deliver all the 787s we have in our plan by the end of [2013],” Jim Albaugh said

    Indeed! After all, they are delivering 3.5 a month right now! (same article) Aren’t they? 10 a month next year should be just as possible!

    • … it’s not lying if you make a poit of never looking at anything except the latests powerpoint dreams…

    • To be fair, 3.5 units per month is, according to Boeing, the current production rate.

      For the company to start being credible once again, IMO Boeing needs to stop regurgitating the same unrealistic 787 delivery schedule and production ramp-up, over and over again.

    • The article may say that they are delivering 3.5 a month but in REALITY they have delivered only five during the first two months of the year.
      As usual with the 787 Boeing is spinning the news like crazy.

  2. So, will several of the reworked B-787s become available for delivery together, or in a relitively short time period (1-3 weeks) of each other? Deliverying 35 B-787s in the remaining 9.5 months of this year is a very ambishish goal. I really hope that Boeing can do it. It looks like they are well on their way towards deliverying 35 B-747-8F/Is this year. Isn’t LH about to take their first B-747-8I soon?

    The delam issue is not a major issue, and I have said that many times before. How close is Boeing to B-787 Line # 66 anyway? It seems to me they should be in the Line #40s about right now for assembly.

    Both Boeing and Airbus traditionally have given discounts on future orders, spares, maintenance packages, etc. for delievery delay compensation. I just don’t see Boeing writing a check to AI for $500M, maybe they will offer them a few B-767s?

      • Thanks, Greg. So, the first “clean” B-787 assembly is coming up soon. At the current 3.5 airplanes per month, that means line # 66 should begin fianl assembly around the end of April to about the middle of May.

      • I can’t help but notice that none of these aircraft being assembled, or at various stages of assembly/rework, are actually being delivered.

        Remember the days when Boeing used to call an 8-K press conference to announce a 10-day production line “pause”?

      • 60 frames – 5 delivered = 55 frames currently stored semicomplete.
        Let us be generous and assume reworking to take
        till mid/end 2014 : ~30month ~= 1.8/month expected
        deliveries from rework airframes with the current ( initial )
        rate being at well below 1/month.
        Assuming some learning effects that looks reasonably plausible.

  3. I really do not understand why they continue to produce production forecasts that incorporate 787 and 748 together.

    • They are just trying to soften the blow of saying outright that the 787 will not be making its production targets by a longshot AGAIN this year.
      And if anyone believes that they will be delivering 10 frames a month next year I have an orange bridge to sell them in the Bay area….

  4. Never say delamination is a small or typical issue with composites, what it means is there is a production group who does not understand or is not capable of producing the correct structure. This is huge and should be a big red flag to the company and their structure and stress engineers. A composite structure depends on the total integrity of the complete structure. A delamination in any part of a composite structure is far worse than a crack, popped rivets or broken fasteners in an all aluminum monocoque structure. Then you must ask the question what other areas or compoents are at risk from this group.

    • The thing I dislike is that the FAA seems to have been in the path putting their foot down to fix this.
      Nothing against the FAA but Boeing should have good enough working QA to not need external prompting.

  5. Jim Albaugh “I think if we settled for $500 million, somebody would have told me. “We don’t comment on deals that we’ve done, but I can tell you that we’re not writing anybody a check for $500 million.”

    Perhaps somebody did indeed not tell him, just like nobody supposedly told the big guys at Boeing about the shell of an aircraft they had at rollout or the “side of body”, directly at the wing root issues that were discovered immediately before the Paris Airshow, but apparently not reported to those in charge until later.

    Yeahhhh right!

    All he has said is that they aren’t handing over $500 million in one shot and that he won’t comment on the specifics. He has not said that the amount Air India is claiming is false.

    As for Air India, that is not a very clever tactic. I wonder if that person who reported this figure is still working.

    Delamination is probably not near as severe as people make it out to be but more of an issue than Boeing makes it out to be (like the A380 wing clips).

    As for deliveries and production rates: it is wonderful how many they are producing but, as others have noted, when will they start delivering at the rate they are producing?
    More important, won’t this imbalance of production to delivery soon create a big logjam of aircraft?

  6. The Motley Fool has a take one the ramifications of Air India’s claims.

    Boeing Could Have a $16 Billion Problem

    What does this mean to you?

    In a way, you could argue that this is good news for Boeing. I mean, as recently as last February, we were still talking about the possibility that Boeing’s penalty payments could climb into the tens of billions of dollars. Viewed in that context, my new best guess at $15.8 billion in potential penalties removes a lot of risk from an investment in Boeing.

  7. I don’t know about Air India’s Claim but it’s like a false rumor. Still Boeing is having problems how to sell this model. But again, Boeing is great for hiding it’s mistakes or doing damage control. I maybe wrong and same with other sources like:

    Things may change later on regarding Boeing 787. It’s up to the company to keep pushing and building sales momentum.

    • You do know Boeing has sold 19 B-787s so far this year. What mistakes is Boeing hiding? Seems to me Airbus was initially hiding the full impact on the A-380 rib feet crack problems. They knew loing before they told the airlines that there were two types of cracks, with type-B cracks being the more serious of the two.

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