FedEx commitments for 777F not new

Jan. 5, 2015: Last year ended with stories that FedEx had commitments for 16 Boeing 777Fs. The reports concluded that this was a new deal.

It’s not.

This story, published Dec. 31, neatly summed up the report and included a comment from FedEx that these commitments have been listed in documents since August.

This did prompt us to take a dive into FedEx and Boeing documents and information to try and sort out some of the confusion. Here’s what we found:

  • Through Dec. 22, Boeing shows 15 777 orders from Unidentified customers in 2015, but none from FedEx.
  • On the Boeing Unfilled Orders website through November, the most recent update, FedEx is shown to have seven 777Fs to be delivered.
  • Boeing also shows a total of 42 777Fs to be delivered. Of these, 33 were to Unidentified customers.
  • FedEx’s Nov. 30 10Q shows 16 777Fs scheduled for delivery from 2018 through 2020 and “thereafter.”
  • FedEx’s Aug. 31 10Q shows these 16 plus one more that was scheduled for delivery in 2015.
  • FedEx’s May 31 10K also showed these airplanes. Initially nine orders were conditional on a labor contract. This since has been resolved, and the planes are no longer shown as conditional.
  • Given the Boeing Unfilled orders website showing seven for FedEx, and FedEx showing 16, this means nine of the 33 Unidentified are to FedEx.

31 Comments on “FedEx commitments for 777F not new

    • I disagree. Obviously FedEx and Boeing have been “juggling” the 777s (s0oke of which were deferred) as well as replacing some 777 orders with 767 orders.

      Add, subtract, add and it does get confused as this is not a typical order pattern (not unheard of either when an operator changes its mind)

      Keesjes statement is about the same as writing “The Sky is Blue”.

  1. Something new on A320neo delays and slow deliveries on redesigned A350?

  2. As long as we’re divulging info. On sketchy orders,could someone please tell me why Airbus’ 84 strong kingfisher order is still in the books.
    No wonder they so few cancellations.

    • This has been explained repeatedly over the years.

      There is a bilateral contract.
      Money changed hands.
      The buyer is in limbo ( i.e. can not act ) but still exists on paper.
      how do you cancel a contract between two parties under those conditions. … and what would you gain anyway?

      • I understand the legal aspect, but does Airbus really report these in their outstanding backlog to investors and in marketing materials? That’s is hard to believe and does not give me a lot of confidence as an investor.

        • “That’s is hard to believe and does not give me a lot of confidence as an investor.”

          you showcase the problem with “investors”. They tend to be only superficially knowledgeable from reading what others with similar lack in deep understanding write. ( RR is a case in point here.)

          They ( very much IMHO ) predominantly are not “investors” but trade in shares. You wold have to buy fresh shares to actually invest in a company 🙂

        • Whew getting a bit deep in here! Remember it’s the investors responsibility to ferret out BS, not the company’s to not fling the BS!

          • “Caveat emptor” is the lesson here.

            Would have hoped Sarbanes-Oxley had reigned in such behavior.

            Anyway, I guess all the OEM backlog market share charts the analysts generate are worthless because carriers like Kingfisher are included.

          • Let’s keep things in perspective here. The inclusion of Kingfisher’s yet-to-be-cancelled order makes hardly any difference to Airbus’s backlog.

          • Reminds me of the old saw about “a billion here, a billion there, pretty soon you’re talking real money”

            Can’t help but wonder how many more Kingishers are included in the backlog figures.

  3. Looking at the 777F, I would guess that with current and future orders, production is good for 120 more over the next ten years, then done at the end of 2025.

  4. Mike, I hope so. 2016 will have first deliveries to Air China, AirAsia, Asiana Airlines, Cathay Pacific, China Airlines, Etihad Airways, Lufthansa, Singapore Airlines, Avianca and Thai Airways.
    With 6 new A350 operators from 2017 and 8 from 2018.

    “On sketchy orders, could someone please tell me why Airbus’ 84 strong kingfisher order is still in the books.”

    Yes, that would be interesting. Maybe keeping them in the book shas some value, ask ANA.

    On sketchy orders, Unidentified Airways is by far Boeing customer this year, grabbing 40% of the orders. Congratulation! I assume they’re rock solid, for the sales total anyway. Perception is all. http://www.boeing.com/commercial/#/orders-deliveries

  5. That has to be the most lame excuse I’ve ever heard..
    To keep an order from an airline that hasn’t existed in over 5 yrs. is absolute absurdity. .
    Then again, perhaps iran airs a310 order is sill in the books as well.

    • If Airbus wants to support the idea that they have a claim, in compensation for a loss, based upon the sales contract, then they have to showcase that they have been impeached … if now they free and remarket those Kingfisher slots, they undermine their own legal position. What they are doing is not artificial window-dressing but warranted legal-speak, with multi-billon consequences in the forthcoming Kingfisher Créanciers’ dogfight for spoiled remainders …

  6. Maybe if partial payments have been made (deposits, stage payments) but then the carrier has not continued with the payments but has also not officially cancelled the order and/or requested a refund then the order has to stay on the books.

    • There is no “has to” involved. Its not a legal thing, its a company policy.

      Obviously its better to have your orders look fatter than they are (particularly A380s right now though 747s fall in there as well)

      In the past Boeing played it straight, magical orders did not appear on the previous years books after the first of the year per Airbus.

      Boeing has gone to pie in the sky aspect with the 737 orders and the 747s orders in their publicity statements.

  7. I think the years numbers has Boeing delivering (as opposed to orders) looks like about 120 more this year than Airbus.

    135 of those 787s (beating goal of 125) with 383 quietly flaying doing their job.

    As that’s over rate 10 a month there were some catch ups.

    • Yes, only 4 of those catch-ups are early build airframes (1 terrible teen and the 3 test -9’s). I think the other 11 are because of improved completeness upon rollout and working through the wing crack issue in late 2014.

      I believe 131 new builds in 2015 and 110 new builds in 2014 are records for widebody deliveries.

    • No, there are still 12 early build frames to process; 1 will fly for the first time next week, 1 is currently still used for test flights, 6 are being actively reworked, and 4 are waiting for rework, although only 3 of those remain stored on the runway. It looks like Boeing is trying to deliver 6 of them this year. They still need to find customers for 3 of them (counting the test frame).

  8. The article is about Boeing, not sure why all the deflection to Airbus. But, not surprising given the authors.

    Meanwhile, back on topic – Scott, I believe you’ve made an error in your review of Boeing’s unfilled orders. The 33 unfilled orders for ‘unidentified customers’ are for all models of 777. Of those 33, only 6 are 777Fs (ordered on 12 Dec, 2014).

    • I bet Boeing discards its 747 order before Airbus discards the Transaero A380 order if the Kingfisher debacle is a guide.

      For the record, Kingfisher stopped flying in 2012 and failed to renew its flying permit 12/31/14 so it has lost its most valuable asset. Also, Kingfisher ownership is being investigated for willful defaulting on its obligations (which seems a lot like fraud) and the creditors are currently auctioning off Kingfisher’s assets. I fail to see a difference between bankrupt Kingfisher and bankrupt Skymark other than one is still flying and the other has a $6.8 billion book value order for Airbus airplanes.

      One point of clarification, how exactly did Airbus keep the Skymark order “on the books” while also publicly cancelling the order? Cancelling is the exact opposite of “keeping them on the books” no? That’s TC’s point: that whether you list the order to your investors as a sign of your financial health is different from whether you had a contractual obligation to deliver a product.

      • For clarity, we’re ony talking the NEO order are we. It deems the Kingfisher A350/A380 eere removed by Airbus years ago. I doubt Leahy lost much sleep over those NEO’s. Because there’s 4500 in the backlog. Even CEO’s are overbooked. I’m amazed by ease the market / observers disgard the enormous Boeing “undisclosed” customer base. Nobody is asking questions..

      • As long as the contract hasn’t formally canceled, your contractual partner is not formally existing any longer or you have triggered and auto-termination deadline of the contract, the old saying “Pacta sunt servanda” is valid. At the end someone can still buy into the contract (based on the conditions this may be an option) and say “Deliver to me”.

        I think that is the point … the list of order lists the number of contractual obligations to build aircrafts. While it’s perhaps splitting hairs, a list of orders without Kingfisher would be incorrect and thus representing the the situation of the company incorrectly, as the obligation to deliver is a liability of the company. And since Enron authorities are reacting very humorless to falsely representing documentation.

        Given that some of the people writing here thinking that Airbus and it’s investors should celebrate the day when the last a380 is build the information how many outstanding contractual obligations you have is relevant to investors.

        And so i think, that neither of the both vendors will remove orders in the situation like Kingfisher from the lists.

  9. On the 777 orders comments goes easily on Airbus which to my knowledge has nothing to do with Boeing’s 777 sales

    I would like someone try to find out were the 1117 “unidentified” B737 will go ??
    1117 is 974 as of end of November plus 143 for december only ( a huge number for the last month of the year a so called “Leahy style order ?”

    I follow this for the last 3 years ….Scott always maintain those are real orders
    I maintain that PR in Boeing are completly lost !!!

  10. I wonder about the relevance of this article, I guess the intention was to shoot down the enthusiasm around the announcement. The bottom line is , these commitments will keep the 777 line going till the 777x starts production. Good for Boeing.

    • @lebonvivant There was no announcement, either from Boeing or FedEx. Some reporter looked at FDX’s stat sheet and simply came to an erroneous conclusion.

      • Scott, I believe you’ve made an error in your review of Boeing’s unfilled orders. The 33 unfilled orders for ‘unidentified customers’ are for all models of 777. Of those 33, only 6 are 777Fs (ordered on 12 Dec, 2014).

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