Mid-year production/delivery update for Boeing

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Introduction

July 24, 2017, © Leeham Co.: Boeing’s 2Q earnings call is Wednesday and analysts will be watching for information about the 787 deferred production costs, potential production rate changes for the 787 and for the 777 Classic.

We looked at the 787 costs last week.

It’s also mid-year and LNC is taking an updated look and production and delivery rate streams for Boeing, Airbus, Bombardier and Embraer. The Airfinance Journal Fleet Tracker is our resource for this report.

We begin with Boeing in advance of its earnings call.

Summary
  • A case can be made for taking 737 production rates to 60/mo.
  • 777 Classic rates still may need to come down.
  • 787 rate increase remains questionable.

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Pontifications: JADC 20-year forecast: VLA, NMA and other data

By Scott Hamilton

July 24, 2017, © Leeham Co.: The Japan Aircraft Development Corp (JADC) just published its 2017-2037 jet and turboprop forecast. JADC forecasts a demand for 33,336 jet airliners and some 2,000 turboprops.

JADC is partly owned by Mitsubishi, which is developing the MRJ70/90 and which is on several Boeing programs.

I like the JADC forecast because it segments the seating categories in more detail than Airbus and Boeing and somewhat differently than Bombardier and Embraer.

I also view JADC as having less of an axe to grind than the Big Four OEMs.

A couple of quick take-aways:

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Business case for NMA remains uncertain

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Introduction

July 17, 2017, © Leeham Co.: We’re half way through 2017. Boeing reported orders through July 11, a week ago. Airbus won’t update its July orders until the end of the month.

Through July 11, Boeing reported 116 net wide-body orders: 15 for the 767, 33 for the 777 and 75 for the 787. Net cancellations of -7 for the 747 are included in the net 116 figure.

The 15 767s were not commercial models, however, but 767-2C tankers for the USAF.

Over at Airbus, none of China’s 40 commitments announced July 5 for 40 A350s are in the June summary, and won’t be in the Orders tally until the commitments turn into firm orders. Through June, airbus had net 26 widebody orders: three A330-200s and 29 A350-900. There were cancellations of four A330-800s and two A380s.

If the 40 China A350s were included, this would bring Airbus to 66 widebody orders, still well short of Boeing’s YTD figure.

Summary
  • Airbus product gap widens as A330-200/800 stalls.
  • Boeing 787 strength comes from 787-9; 787-8 remains minor player.
  • Middle of the Market business case still unproved.

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Jet sales in 75-150 seat lag Airbus, Boeing

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Introduction

The Mitsubishi MRJ90 hasn’t recorded a sale in a year. Photo by Scott Hamilton.

July 13, 2017, © Leeham Co.: While analysts and reporters focus on the high-profile order competition between Airbus and Boeing, it’s time to look at Bombardier and Embraer, along with the 75-150 seat sector.

Boeing is doing better than expected this year, due largely to the launch of the 737 MAX 10. Airbus is struggling year-to-date, but received a big boost post-Paris Air Show with an agreement to sell 140 A320s and A350s to China. At this stage, it’s not a firm order, however.

How are Bombardier and Embraer doing in their core markets of 75-150 seats?

Just awful.

Sukhoi and Mitsubishi aren’t doing any better.

Summary
  • Few new sales in 2017 in the 75-150 seat sector.
  • Low fuel prices, Scope Clause and general order downturn converge.
  • Embraer’s Paris Air Show results boosted this OEM’s year-to-date performance.

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MAX 8 conversions to MAX 10 outweigh MAX 9

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Introduction

July 3, 2017, © Leeham Co.: There were conversions of 214 orders from other 737 MAX programs in favor of the 361 orders and commitments announced at the Paris Air Show for the launch of the 737 MAX 10.

Aside from the easily identifiable 100 MAX 9 orders from United Airlines, the other conversions weren’t readily apparent.

An analysis by LNC indicates that about half of the conversions came from the MAX 8.

Summary
  • The MAX 10 orders and commitments surpass the MAX 9 after PAS, becoming the second most in-demand of the MAX family.
  • LNC estimates that about 300 orders remain for the MAX 9, higher if Lion Air’s MAX order is allocated on a pro-rata basis.
  • A lot of MAX 8/9 series orders are TBD, with no immediate selection by the customer.

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Pontifications: Going where the excitement is

By Scott Hamilton

July 3, 2017, © Leeham Co.: Friday’s news leak to Reuters that Airbus CEO Tom Enders will assume direct control over commercial airplane sales is but the latest in a nine-month-long set of changes not just at Airbus but also at Boeing.

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Bjorn’s Corner: Electric aircraft

By Bjorn Fehrm

June 30, 2017, ©. Leeham Co: One of the areas I explored while at Paris Air Show last week was electric aircraft technology. With electric aircraft, we mean an aircraft where the propeller/fan is driven my an electrical motor.

We don’t talk about “more electrical aircraft systems” like for the Boeing 787.

One of the companies investing in technology for electric aircraft is Siemens. A Siemens-engined aerobatic aircraft, the Extra 330LE, made daily flight displays during the show.

Figure 1. The Siemens engined Extra 330LE aerobatic aircraft. Source: Siemens.

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MRJ entering more stable phase

By Bjorn Fehrm

June 28, 2017, ©. Leeham Co: The Mitsubishi Regional Jet, MRJ, has been through troubled years. The aircraft, which should have entered the market 2013, will now be delivered to first customer, All Nippon Airways (ANA), in mid-2020.

The latest delay, announced in January 2017, was significant: from mid-2018 to mid-2020.We sat down with MRJ’s Program and Flight test management to understand what is going on. Read more

Boeing’s advantage going into 2018

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Introduction

June 26, 2017, © Leeham Co.: One air show doesn’t make a trend, but the Paris event and other signs before it draw one inescapable conclusion: Boeing has momentum.

With Airbus about to undergo a sea change with the retirement of John Leahy, its COO-Customer who for decades has been its top salesman, Boeing will try to return to a sustained sales leadership position that it lost a decade ago under the hard-driving Leahy.

Summary
  • Boeing’s rare air show win was about more than just the 737 MAX 10.
  • Commercial acceptance of the MAX 10 was greater than anticipated.
  • Development of the “797” appears to be increasingly likely.
  • Airbus’ public response that it has the Middle of the Market covered falls short.
  • New blood at Boeing is important.

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Pontifications: Read the fine print

By Scott Hamilton

June 26, 2017, © Leeham Co.:

Are the widebodies orders seeing some earlier-than-expected recovery?

Airbus and Boeing said they don’t expect to see a renewed demand for wide-bodied aircraft until around 2022, +/-. But Boeing certainly had stronger-than-expected orders at last week’s Paris Air Show.

  • Read the decision in the Boeing-Bombardier complaint. The document is at the end of this column.

The company received orders and commitments for 50 787s and six 777s.

Boeing said it expects new 777 Classic and 777X orders this year.

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