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Category Archives: Boeing

Boeing delivers the 8,000th 737 to United Airlines

Boeing (Chicago and Seattle) yesterday (April 16) delivered the 8,000th 737 to come off the production line to United Airlines (Chicago) as N68821, marking another important milestone for the world’s best-selling airplane. The airplane, a Next-Generation 737-900 ER (Extended Range), features a special logo.

The 737 is the first commercial airplane in history to reach this delivery milestone. The program has a strong backlog with more than 3,700 airplanes on order, including 1,934 orders for the new 737 MAX.

United was the first airline to order and take delivery of the 737-200. Since 1965, United has taken delivery of more than 550 737s and operated nearly every model.

Copyright Photo: Joe G. Walker/AirlinersGallery.com. Boeing 737-924 ER N68821 (msn 43535) lands at Boeing Field in Seattle. N68821 has small “8000th 737″ gray titles by the main cabin door.

United Airlines (current): AG Slide Show

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Boeing opens 737 Interior Configuration Studio

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Boeing (Chicago and Seattle) has debuted its new 737 Configuration Studio, a new facility where airline customers can choose their jetliner interiors. The 20,000 square-foot (1,900 square-meter) studio is located in Renton, Washington near the factory where 42 737s are produced per month.

Similar to the 787 Dreamliner Gallery, the 737 Configuration Studio provides a private and welcoming showroom environment to assist Next-Generation 737 and 737 MAX customers with the design and configuration of new airplane interiors.

More than two dozen major interior configuration introductions are expected over the next two years. To help 737 customers select among them, the studio presents views of suppliers’ products side by side in one location. Customers can see, touch and experience choices in galleys, seats and in-flight entertainment. They also can select interior colors and decors that highlight and support their brand.

Additionally, customers can use the 737 Boeing Sky Interior light lab (below) to study how fabrics, carpets, drapes and uniforms appear under various light settings. The facility also houses the “new features room,” which provides customers with a glimpse of future technologies.

Copyright Photos: Boeing.

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Boeing announces the launch of the Boeing Business Jet MAX 8 with the first order

737- MAX8 BBJ Artwork

Boeing (Chicago and Seattle) has announced the launch of the Boeing Business Jet (BBJ) MAX family of airplanes after receiving the first order from an undisclosed customer. The order is for a BBJ MAX 8, which is based on the 737 MAX 8 and the newest business jet to join the BBJ family.

BBJ is the market leader in the large cabin, ultra-long-range business jet market and the new BBJ MAX will extend that advantage.

With new CFM International LEAP-1B engines and other aerodynamic improvements including Advanced Technology winglets, the 737 MAX will provide a 14 percent fuel-use improvement compared to today’s most efficient single-aisle airplanes. The fuel-use improvement is even greater at longer ranges typically flown by BBJ customers.

The BBJ MAX 8 will have a range of 6,325 nautical miles (11,713 km), an increase of more than 800 nautical miles (1,482 km) over the BBJ2. It will share the same cabin size with today’s BBJ2, offering customers a 19-foot (5.8 meter) longer cabin and three times the cargo space of today’s BBJ, while improving on its market-leading range capability and maintaining the BBJ advantages of lower cabin altitude, unmatched reliability and outstanding product support around the globe. The BBJ continues to be the leading choice for businesses, corporations and private owners.

The new BBJ family also will include the BBJ MAX 9, based on the 737 MAX 9, and is expected to offer a 6,255 nautical mile (11,584 km) range with an even larger cabin than the BBJ MAX 8. Plans for a BBJ MAX 7 are still being studied.

Development of the 737 MAX is on schedule with firm configuration of the airplane achieved in July 2013. First flight is scheduled in 2016 with deliveries to commercial airline customers beginning in 2017. The 737 MAX has accumulated more than 1,900 orders to date from 37 customers worldwide

The first BBJ MAX will be delivered in 2018 without an interior, and a completion center of the customer’s choosing will install the jet’s VIP interior.

Image: Boeing.

Boeing rolls out the first Next-Generation 737 at the increased rate

The first Boeing (Chicago and Seattle) Next-Generation 737 to be built at the increased rate of 42 airplanes per month rolled out of the factory in Renton, Washington yesterday (march 19). The 737-800 will soon be delivered to Airberlin (Berlin-Tegel) and ultimately leased to Transavia France (Paris).

The airplane will now undergo functional, systems and flight testing over the next three weeks before being delivered.

Market demand remains strong for the Next-Generation 737, the world’s best-selling commercial jetliner. Since 2010, production has risen about 33 percent, from 31.5 to 42 airplanes a month. As previously announced, the production rate is scheduled to increase to 47 airplanes a month in 2017.

Copyright Photo: Boeing.

The FAA and Boeing complete their joint review of the 787′s critical systems

The U.S. Federal Aviation Administration (FAA) and Boeing (Chicago and Seattle) have completed a comprehensive review of the 787′s critical systems. The joint review, initiated in January 2013, included an examination of the processes for the design, certification and production of the 787-8. The review’s findings validate the integrity of the airplane’s design and confirm the strength of the processes used to identify and correct issues that emerged before and after the airplane’s certification.

The review concludes that the 787 meets the intended high level of safety expected by the FAA and Boeing. The report includes recommendations aimed at further strengthening the FAA and Boeing’s processes.

“We welcomed the opportunity presented by this joint review of the 787 and its in-service performance,” said Boeing Commercial Airplanes President and CEO Ray Conner. “The findings validate our confidence in both the design of the airplane and the disciplined process used to identify and correct in-service issues as they arise. I am grateful for the hard work of the joint review team and for its recommendations, which will allow us to further improve our processes as we move forward.”

The review team outlined four recommended improvements for Boeing. Three of the recommendations focus on improving the flow of information, standards and expectations between the company and its suppliers. Boeing has already taken significant steps to implement these recommendations.

The fourth recommendation encourages Boeing to continue implementing and maturing the gated processes for development programs.

“Gated process” refers to the disciplined criteria followed as a new airplane model is developed. This ensures a sufficient level of maturity is gained before a program proceeds to key milestones such as design completion, production start and entry into service.

Boeing has made a range of improvements to its airplane development processes since the start of the 787 program. These efforts included a restructuring last year to bring all commercial airplane development programs under one umbrella organization.

Copyright Photo: Brandon Farris/AirlinersGallery.com.

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Boeing starts the expansion of the 737 Commercial Delivery Center at Boeing Field

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Boeing (Chicago and Seattle) has kicked off expansion of its 737 Commercial Delivery Center (CDC) at Boeing Field in Seattle. The project more than doubles the space that will be available for customers and groups supporting increased 737 deliveries.

The expanded CDC will be more than 90,000 square feet and include a new three-story building, as well as new delivery and departure areas with three covered jetways. The design features an open, airy look with large windows overlooking the Boeing Field flight line. The CDC expansion is the latest of many investments Boeing is making across the Puget Sound region and in the future of the 737 program.

Production of the 737 is set to increase to 42 airplanes per month in April and to 47 airplanes per month in 2017, an increase in output of nearly 50 percent since 2010. Deliveries of the 737 MAX, with the latest technology CFM International LEAP-1B engines and other efficiency enhancements like Advanced Technology winglets, will also begin in 2017 at the upgraded facility.

Plans are in place to ensure seamless deliveries to 737 customers during construction, which includes the demolition of one building. The CDC expansion is scheduled for completion in mid-2015.

Boeing reports wing “hairline cracks” on 40 new 787s!

Boeing logo

Boeing (Chicago and Seattle) yesterday reported “hairline cracks” on about 40 787s in production according to Reuters. The wings are made by Mitsubishi. The cracks were also discovered on the new 787-9 which could delay the introduction of the new type. No cracks were found on aircraft currently flying with the airlines.

Read the full report: CLICK HERE

 

For sale – early “teen” overweight 787s sitting at Everett, Washington – great bargains

Air India 787-8 VT-ANB (07-2nd)(Grd) PAE (ND)(LRW)

Boeing (Chicago and Seattle) according to Bloomberg “is struggling to find buyers for 11 of its earliest 787 Dreamliners valued at $1.1 billion after two airlines dropped orders for the holdover models from the jet’s troubled birth.”

The partially built 787s, now sitting unfinished at Paine Field in Everett, Washington, are known as the “terrible teens” (due to the line numbers). The undelivered aircraft start at line number 10. The “terrible teens” weight more than the current production and flying 787s and will not be able to fly as far if they are finished and delivered to a willing customer looking for a bargain. Most have been parked for around four years according to the report.

Garuda Indonesia is reportedly considering buying the under-performing “terrible teens” according to the report.

The 11 aircraft were originally destined for Lion Air, RwandAir and Transaero Airlines.

Read the full report: CLICK HERE

Bloomberg originally reported in January 2010 how Boeing was working on trimming the weight of the early 787 Dreamliners.

Read this report: CLICK HERE

Copyright Photo: Nick Dean. Most of the “terrible teens” are sitting in a sealed manner like the pictured Air India 787-8  VT-ANB (msn 37274, line number 26) once did. VT-ANB was just delivered to Air India on January 31, 2014.

Boeing to build the 777X wings in Everett, Washington

Boeing 777X (Boeing)(LR)

Boeing (Chicago and Seattle) today announced the selection of its Everett, Washington, site as the location for a new composite wing center for the 777X program. Boeing evaluated criteria that were designed to find the wing fabrication location that would best support the 777X business plan. The new composite wing center will be located north of the Everett factory and will sustain thousands of Puget Sound area jobs for years to come.

Boeing selected the Everett site for 777X final assembly following the International Association of Machinists & Aerospace Workers (IAM) District 751 approval of an eight-year contract extension earlier this year. As part of the contract extension, the company agreed to fabricate the parts for, and assemble, the 777X composite wings in the Puget Sound region. After studying several options, the company determined that the Everett site will meet its business needs for fabrication and assembly.

The new facility will support fabrication of the 777X composite wings and will be approximately 1 million square feet. Construction on the new facility is scheduled to begin later this year.

Assembly of the composite wings will also take place at the company’s Everett site, with the exact location to be determined in the months ahead.

The 777X builds on today’s passenger-preferred, market-leading 777 and offers more market coverage and revenue capability than the competition. First delivery is targeted for 2020.

Image: Boeing.

Aviation Partners Boeing receives FAA certification for its Split Scimitar Winglets

AVIATION PARTNERS BOEING UNITED AIRLINES 737-800

Aviation Partners Boeing (APB) (Seattle) has announced it has received Supplemental Type Certification (STC) from the FAA for Split Scimitar Winglets to be installed on Boeing 737-800 aircraft. According to the company, “the Split Scimitar Winglet program is the culmination of a five-year design effort using the latest computational fluid dynamic technology to redefine the aerodynamics of the Blended Winglet into an all-new Split Scimitar Winglet. The unique feature of the Split Scimitar Winglet is that it uses the existing Blended Winglet structure, but adds new strengthened spars, aerodynamic scimitar tips, and a large ventral strake.”

APB will develop and certify the Split Scimitar Winglet modification for all of the Boeing 737-700, 800 and 900 series aircraft including Boeing Business Jets.  APB expects to start certification flight testing on the 737-900ER in mid-February achieving certification by late July 2014.

APB’s Split Scimitar Winglet program is the most successful product launch in its history.  Since launching the program early last year, APB has now taken orders and options for 1,461 Split Scimitar Winglet systems. Over the last 10 years, APB has sold more than 7,000 Blended Winglet Systems.  5,300 Blended Winglet Systems are now in service with over 200 airlines in more than 100 countries. APB estimates that Blended Winglets have saved airlines worldwide 4.1 billion gallons of jet fuel to-date thus eliminating over 43 million tons of carbon dioxide emissions.

Aviation Partners Boeing is a Seattle based joint venture of Aviation Partners, Inc. and The Boeing Company.

Copyright Photo: PR Newswire. United Airlines‘ Boeing 737-824 N37277 (msn 31595) is the test and certification airplane. United put the first aircraft with Split Scimitar Winglets into revenue service of February 18, 2014 between the Houston (Bush Intercontinental Airport) hub and Los Angeles as flight UA 1273.

United Airlines: AG Slide Show

Boeing increases the 737 monthly production rate to 42 airplanes

Boeing (Chicago and Seattle) is starting assembly this week of the first Next-Generation 737 to be built at the increased rate of 42 airplanes per month. Since 2010, production of the 737 has increased about 33 percent, from 31.5 to 42 airplanes a month, its highest rate ever.

Early Wednesday morning, mechanics will load initial parts of the spars – internal support structures in the wings – into an automated spar-assembly machine. The spar is the first step in building the wings and marks the start of the assembly of the airplane at the Renton, Washington factory.

The first Next-Generation 737 built at the new rate is scheduled to be delivered in the second quarter. As previously announced, the 737 production rate is scheduled to increase to 47 airplanes a month in 2017.

Copyright Photo: Michael B. Ing/AirlinersGallery.com. Boeing 737-852 XA-AME (msn 36708) of AeroMexico approaches the runway at Los Angeles International Airport.

AeroMexico: AG Slide Show

Boeing introduces a special Seattle Seahawks Boeing 747-8 logo jet for the Super Bowl

Seahawks-Boeing 747-8F N780BA (14)(Grd) PAE (Boeing)(LR)

Boeing (Chicago and Seattle) yesterday (January 29) revealed a 747-8 Freighter (N770BA) painted in the livery of the NFL’s Seattle Seahawks. The livery commemorates the team’s National Football Conference Championship and upcoming appearance in Super Bowl XLVIII.

Boeing is a sponsor of the Seattle Seahawks and has partnered with the team for more than a decade on programs in the Puget Sound area.

“The Seahawks have been an inspiration to our entire community throughout this incredible season,” said Boeing Commercial Airplanes President and CEO Ray Conner. “We’re honored that we could join together two Northwest icons, the Seahawks and the 747, for this special salute from the entire Boeing team.”

This 747-8 is owned by Boeing and currently being used for flight testing. The special livery features the distinctive Seahawks logo and a “12″ on the tail to salute the team’s fans. The airplane will make its first flight in its new livery on Thurs., January 30.

“The 747 team is proud that one of our airplanes could be used as a tribute to the Seahawks’ success this season and a rallying cry for the team as they prepare for the Super Bowl,” said Eric Lindblad, vice president and general manager, 747 program, Boeing Commercial Airplanes. “The partnerships we have with the Seahawks and others are making a positive difference in the communities where Boeing employees live and work. We join with all Seahawks fans in wishing the team success on Sunday.”

Boeing 747-8 Seahawks Livery Fun Facts

  • Seattle Seahawks quarterback Russell Wilson’s longest pass this season, 80 yards (240 ft.), was almost the same length as a 747-8 fuselage (243.5 ft.)
  • Russell Wilson threw for 3,357 yards (10,071 ft.) this season, similar to the runway takeoff distance for a 747-8 (10,650 ft.)
  • Seattle Seahawks wide receiver Percy Harvin can dash the full length of the 747-8 main deck, 180 ft., in less than seven seconds
  • Seattle Seahawks running back Marshawn Lynch can squat with 16 economy seats (30 lbs. per seat)
  • A 747-8 Freighter can carry 121 million Skittles candies, or 302,400 one lb. bags
  • It would take 144 747-8 passenger airplanes (Intercontinentals) to carry all the Seahawks fans in CenturyLink Field (67,000 seats)
  • The 747-8 can cover the length of a football field in one second at takeoff
  • Seahawks fans’ Guinness World Record for crowd noise is approximately 38 times louder than the 747-8 at departure

On January 30 the Boeing Seattle Seahawks 747 took to the skies over Washington in advance of the team’s appearance Sunday in Super Bowl XLVIII.

The airplane’s flight pattern took it past Seattle landmarks including the Space Needle and CenturyLink Field, home of the Seahawks. The 747-8 then flew over Eastern Washington in a pattern that formed the number “12,” a salute to all Seahawks’ fans.

“You may remember that we drew a ’747′ over the continental United States during 747-8 certification flight testing,” said Boeing 747 chief pilot Mark Feuerstein “Although the ’12′ is smaller in scale, the pride and sense of community behind it make it feel just as big for the entire Boeing team.”

Boeing is a sponsor of the Seattle Seahawks and has partnered with the team for more than a decade on programs in the Puget Sound area.

Copyright Photo: Boeing. Boeing 747-87UF N770BA (msn 37564) pushes out of the paint shop at rainy Paine Field.

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Boeing reports fourth quarter and 2013 financial results and onward guidance

The Boeing Company (Chicago) reported fourth-quarter revenue of $23.8 billion and core earnings per share (non-GAAP) that increased 29 percent* to $1.88, driven by strong performance across the company’s businesses and higher deliveries (Table 1). Fourth-quarter core operating earnings (non-GAAP) of $1.8 billion includes a $406 million non-cash charge to settle A-12 litigation dating back to 1991, retiring a longstanding risk to the company. Excluding the A-12 charge, fourth-quarter 2013 core operating earnings increased 22 percent* to $2.2 billion and core operating margin increased to 9.4 percent*. Core and GAAP earnings per share includes a charge of $0.34 per share related to A-12 partially offset by a benefit of $0.28 per share for a tax regulation change.

Revenue rose 6 percent in the full year to a record $86.6 billion and core earnings per share increased 20 percent* to a record $7.07. Full-year 2013 GAAP earnings per share was $5.96.

Core earnings per share guidance for 2014 is set at between $7.00 and $7.20, while GAAP earnings per share guidance is established at between $6.10 and $6.30. Revenue guidance is between $87.5 and $90.5 billion, including commercial deliveries of between 715 and 725. Operating cash flow before pension contributions* is expected to be approximately $7 billion, while operating cash flow guidance is set at approximately $6.25 billion.

“Strong fourth-quarter results underscored an outstanding full year of core operating performance that drove record revenue and earnings and increased returns to shareholders,” said Boeing Chairman and Chief Executive Officer Jim McNerney.

“Our Commercial Airplanes business accelerated delivery of its record backlog by successfully increasing production rates while also achieving important development milestones on the 737 MAX and 787-9 and launching the new 787-10 and 777X models with an unprecedented customer response. Our Defense, Space & Security unit overcame a tough operating environment to record expanded revenue, earnings and margins while executing to our commitments on the KC-46A tanker and developing and delivering important new capabilities to customers, such as the P-8 maritime aircraft and the Inmarsat-5 satellite,” said McNerney.

“For 2014, we remain focused on maintaining our commercial airplanes market leadership, strengthening and repositioning our defense, space and security business and continuing to meet the needs of our customers by improving productivity, executing to development plans and delivering our unmatched portfolio of innovative aerospace products and services.”

Table 2. Cash Flow Fourth Quarter Full Year
(Millions) 2013 2012 2013 2012
Operating Cash Flow Before Pension Contributions* $1,409 $4,204 $9,721 $9,058
      Pension Contributions ($29) ($37) ($1,542) ($1,550)
Operating Cash Flow $1,380 $4,167 $8,179 $7,508
Less Additions to Property, Plant & Equipment ($638) ($495) ($2,098) ($1,703)
Free Cash Flow* $742 $3,672 $6,081 $5,805

Operating cash flow in the quarter was $1.4 billion, reflecting commercial airplane production rates, strong core operating performance and timing of receipts and expenditures (Table 2). During the quarter, the company repurchased 7.6 million shares for $1.0 billion and paid $0.4 billion in dividends, reflecting a 10 percent increase in dividends paid compared to the same period of the prior year. Based on the strong cash generation and outlook, in December, the board of directors authorized an additional $10 billionshare repurchase program and raised the quarterly dividend 50 percent.

Table 3. Cash, Marketable Securities and Debt Balances Quarter-End
(Billions) Q4 13 Q3 13
Cash $9.1 $10.0
Marketable Securities 1 $6.2 $5.9
Total $15.3 $15.9
Debt Balances:
The Boeing Company, net of intercompany loans to BCC $7.0 $7.0
Boeing Capital Corporation, including intercompany loans $2.6 $2.6
Total Consolidated Debt $9.6 $9.6
1 Marketable securities consists primarily of time deposits due within one year classified as “short-term investments.”

Cash and investments in marketable securities totaled $15.3 billion at year-end (Table 3), down from$15.9 billion at the beginning of the quarter. Debt was $9.6 billion, unchanged from the beginning of the quarter.

Total company backlog at year-end was a record $441 billion, up from $415 billion at the beginning of the quarter, and included net orders for the quarter of $48 billion. Backlog is up $51 billion from prior year-end, reflecting $135 billion of net orders in 2013.

Segment Results

Boeing Commercial Airplanes

Table 4.  Fourth Quarter Full Year
($ in Millions) 2013 2012 Chg 2013 2012 Chg
Deliveries 172 165 4% 648 601 8%
Revenues $14.6B $14.1B 4% $52.9B $49.1B 8%
Earnings-Ops $1,506 $1,266 19% $5,795 $4,711 23 %
Opg Margin 10.3% 8.9% 1.4 Pts 10.9% 9.6% 1.3 Pts

Boeing Commercial Airplanes fourth-quarter revenue increased to $14.7 billion and full-year revenue increased to a record $53 billion on higher delivery volume. Fourth-quarter operating margin improved to 10.3 percent and full-year operating margin grew to 10.9 percent on the higher volume, favorable delivery mix and continued strong operating performance (Table 4).

During the quarter, the company launched the 777X with 259 orders and commitments. During the year, the 787 program completed first flight of the 787-9, successfully launched the 787-10 and began operating at a 10 per month production rate in final assembly. The 737 program delivered at a record production rate of 38 per month and has won nearly 1,800 firm orders for the 737 MAX since launch. In 2013, a record 648 commercial aircraft were delivered. In January 2014, the company reached an eight-year contract extension through 2024 with the International Association of Machinists & Aerospace Workers District 751 (IAM).

Commercial Airplanes booked 465 net orders during the quarter and 1,355 during the year. Backlog remains strong with 5,080 airplanes valued at a record $374 billion.

Boeing Defense, Space & Security

Table 5.  Fourth Quarter Full Year
(Dollars in Millions) 2013 2012 Chg 2013 2012 Chg
Revenues
Boeing Military Aircraft $4,395 $4,037 9% $15,936 $16,019 (1)%
Network & Space Systems $2,272 $2,024 12% $8,512 $7,911 8%
Global Services & Support $2,188 $2,282 (4)% $8,749 $8,677 1%
Total BDS Revenues $8,855 $8,343 6% $33,197 $32,607 2%
Earnings from Operations
Boeing Military Aircraft $441 $313 41% $1,465 $1,489 (2)%
Network & Space Systems $233 $138 69% $719 $562 28%
Global Services & Support $280 $300 (7)% $1,051 $1,017 3%
Total BDS Earnings from Ops $954 $751 27% $3,235 $3,068 5%
Operating Margin 10.8% 9.0% 1.8 Pts 9.7% 9.4% 0.3 Pts

Boeing Defense, Space & Security’s fourth-quarter revenue increased 6 percent to $8.9 billion, while operating margin increased to 10.8 percent (Table 5). For the full year, revenue increased 2 percent to$33.2 billion, while operating margin increased to 9.7 percent.

Boeing Military Aircraft (BMA) fourth-quarter revenue increased to $4.4 billion, reflecting higher deliveries. Operating margin increased to 10.0 percent, reflecting the higher deliveries and strong performance. During the quarter, BMA achieved Initial Operating Capability (IOC) on the P-8A Poseidon aircraft.

Network & Space Systems (N&SS) fourth-quarter revenue increased to $2.3 billion, reflecting higher delivery volume and mix, and operating margin increased to 10.3 percent on strong performance. During the quarter, N&SS was awarded a contract for a fourth Inmarsat-5 satellite.

Global Services & Support (GS&S) fourth-quarter revenue was $2.2 billion, reflecting lower volume in integrated logistics. Operating margin was 12.8 percent. During the quarter, GS&S was awarded contracts for the B-52 and B-1 bomber modifications and upgrades.

Backlog at Defense, Space & Security was $67 billion, of which 37 percent represents orders with international customers.

Additional Financial Information

Table 6. Additional Financial Information Fourth Quarter Full Year
(Dollars in Millions) 2013 2012 2013 2012
Revenues
Boeing Capital Corporation $105 $129 $408 $468
Other segment $22 $27 $102 $106
Unallocated items and eliminations $123 ($358) ($65) ($610)
Earnings from Operations
Boeing Capital Corporation $9 ($12) $107 $88
Other segment income/(expense) ($99) $31 ($156) ($186)
Unallocated items and eliminations excluding unallocated pension/postretirement expense ($532) ($200) ($1,105) ($492)
Unallocated pension/postretirement expense ($323) ($212) ($1,314) ($899)
Other income, net $15 $23 $56 $62
Interest and debt expense ($96) ($112) ($386) ($442)
Effective tax rate 14.0% 36.3% 26.4% 34.0%

At quarter-end, Boeing Capital Corporation’s (BCC) net portfolio balance was $3.9 billion down from $4.1 billion at the beginning of the quarter. BCC’s debt-to-equity ratio was 5.0-to-1. Other segment earnings decreased $130 million in the quarter partly due to higher asset impairment expense.

Unallocated items and eliminations excluding unallocated pension/postretirement expense increased in the fourth quarter of 2013 primarily due to a $406 million charge associated with the A-12 settlement. Total pension expense for the fourth quarter was $717 million, up from $576 million in the same period last year. The company’s income tax expense was $201 million in the quarter, compared to $557 million in the same period of the prior year, due to a $212 million benefit recorded in fourth-quarter 2013 for a tax regulation change.

Outlook

The company’s 2014 financial guidance (Table 7) reflects continued strong performance in both businesses.

Table 7. Financial Outlook
(Dollars in Billions, except per share data) 2014
The Boeing Company
Revenue $87.5 – 90.5
Core Earnings Per Share* $7.00 – 7.20
Earnings Per Share $6.10 – 6.30
Operating Cash Flow Before Pension Contributions* ~ $7
Operating Cash Flow 1 ~ $6.25
Boeing Commercial Airplanes
Deliveries 2 715 – 725
Revenue $57.5 – 59.5
Operating Margin ~ 10%
Boeing Defense, Space & Security
Revenue
Boeing Military Aircraft ~ $15
Network & Space Systems ~ $7.7
Global Services & Support ~ $7.8
Total BDS Revenue $30 – 31
Operating Margin
Boeing Military Aircraft ~ 9.5%
Network & Space Systems ~ 8.5%
Global Services & Support ~ 10.5%
Total BDS Operating Margin ~ 9.5%
Boeing Capital Corporation
Portfolio Size Lower
Revenue ~ $0.3
Pre-Tax Earnings ~ $0.05
Research & Development ~ $3.2
Capital Expenditures ~ $2.5
Pension Expense 3 ~ $3.1
Effective Tax Rate 4 ~ 31%
1 After discretionary cash pension contributions of $0.75 billion and assuming new aircraft financings under $0.5 billion
2 Assumes approximately 110 787 deliveries
3 Approximately $1.1 billion is expected to be recorded in unallocated items and eliminations
4 Assumes the extension of the research and development tax credit
* Non-GAAP measures. Complete definitions of Boeing’s non-GAAP measures are on page 7, “Non-GAAP Measures Disclosures.”

Boeing’s 2014 revenue guidance is established at between $87.5 and $90.5 billion. Core earnings per share guidance is set at between $7.00 and $7.20, and earnings per share guidance is expected to be between $6.10 and $6.30. Total company 2014 operating cash flow before pension contributions is expected to be approximately $7 billion, while operating cash flow is expected to be approximately $6.25 billion in 2014, including $0.75 billion of discretionary pension contributions. Total company pension expense in 2014 is expected to be approximately $3.1 billion (of which approximately $2.0 billion is expected to be recorded in core operating earnings and $1.1 billion recorded in unallocated items and eliminations).

Commercial Airplanes’ 2014 deliveries are expected to be between 715 and 725, which includes approximately 110 787 deliveries. Revenue at Commercial Airplanes is expected to be between $57.5 and $59.5 billion with operating margins of approximately 10 percent. Defense, Space & Security’s revenue for 2014 is expected to be between $30 and $31 billion with operating margins of approximately 9.5 percent.

Boeing Capital Corporation expects that its aircraft finance portfolio will continue to decline in 2014, as new aircraft financing of less than $0.5 billion is expected to be lower than normal portfolio runoff through customer payments and depreciation. Boeing’s 2014 R&D forecast is approximately $3.2 billion, and capital expenditures for 2014 are expected to be approximately $2.5 billion. Boeing’s effective tax rate is expected to be approximately 31 percent in 2014, which assumes the extension of the research and development tax credit.

Non-GAAP Measures Disclosures

We supplement the reporting of our financial information determined under U.S. generally accepted accounting principles (GAAP) with certain non-GAAP financial information. The non-GAAP financial information presented excludes certain significant items that may not be indicative of, or are unrelated to, results from our ongoing business operations. We believe that these non-GAAP measures provide investors with additional insight into the company’s ongoing business performance. These non-GAAP measures should not be considered in isolation or as a substitute for the related GAAP measures, and other companies may define such measures differently. We encourage investors to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure. The following definitions are provided:

Core Operating Earnings, Core Operating Margin and Core Earnings Per Share

Core operating earnings is defined as GAAP earnings from operations excluding unallocated pension and post-retirement expense. Core operating margin is defined as core operating earnings expressed as a percentage of revenue. Core earnings per share is defined as GAAP diluted earnings per share excluding the net earnings per share impact of unallocated pension and post-retirement expenseUnallocated pension and post-retirement expense represents the portion of pension and other post-retirement costs that are not recognized by business segments for segment reporting purposes. Management uses core operating earnings, core operating margin and core earnings per share for purposes of evaluating and forecasting underlying business performance. Management believes these core earnings measures provide investors additional insights into operational performance as they exclude unallocated pension and post-retirement costs, which primarily represent costs driven by market factors and costs not allocable to government contracts. A reconciliation between the GAAP and non-GAAP measures is provided on page 14.

Core Operating Margin and the Increase in Core Operating Earnings Excluding A-12 Settlement Charge

The company is disclosing the core operating margin and the increase in core operating earnings in the fourth quarter of 2013 over the fourth quarter of 2012 excluding the A-12 settlement charge in the fourth quarter of 2013. Management believes it is useful to occasionally exclude certain items that are not reflective of underlying performance and that can distort period to period performance comparisons. Management uses similar measures for purposes of evaluating and forecasting underlying business performance. A reconciliation between the GAAP and non-GAAP measures is provided on page 14.

Operating Cash Flow Before Pension Contributions

Operating cash flow before pension contributions is defined as GAAP operating cash flow less pension contributions. Management believes operating cash flow before pension contributions provides additional insights into underlying business performance. Management uses operating cash flow before pension contributions as a measure to assess both business performance and overall liquidity. Table 2 provides a reconciliation between GAAP operating cash flow and operating cash flow before pension contributions.

Free Cash Flow

Free cash flow is defined as GAAP operating cash flow less capital expenditures for property, plant and equipment additions. Management believes free cash flow provides investors with an important perspective on the cash available for shareholders, debt repayment, and acquisitions after making the capital investments required to support ongoing business operations and long term value creation. Free cash flow does not represent the residual cash flow available for discretionary expenditures as it excludes certain mandatory expenditures such as repayment of maturing debt. Management uses free cash flow as a measure to assess both business performance and overall liquidity. Table 2 provides a reconciliation between GAAP operating cash flow and free cash flow.

Copyright Photo: Nick Dean/AirlinersGallery.com. Boeing 747-8KZF N50217 (msn 36137) became JA12KZ on delivery.

Boeing rolls out the first 787-8 at the increased production rate, flight track all 787s live with Google Earth

Boeing 787-10 (Boeing)(LR)

Boeing (Chicago) has rolled out the first Boeing 787 Dreamliner built at the rate of 10 airplanes per month. The airplane, a 787-8 and the 155th Dreamliner built, will be delivered to International Lease Finance Corp. for operation by AeroMexico (Mexico City).

The new 10 per month rate is the highest ever for a twin-aisle airplane. The 787 program has now increased its production rate three times in just over a year, including to five airplanes per month in November 2012 and seven per month in May 2013.

Boeing assembles and delivers 787s in two locations: Everett, Washington, and North Charleston, South Carolina.

To date, 115 787s have been delivered to 16 customers. The program has 1,030 total orders from 60 customers worldwide.

This airplane will be the fourth 787 operated by AeroMexico and will be used on the airline’s Mexico City - London Heathrow route.

See the Boeing 787 Dreamliner Dream Pass (a view from the cockpit with pilot commentary): CLICK HERE

Flight Track all Boeing 787s using Flight Tracker and Google Earth: CLICK HERE

Boeing 787 Flight Tracker

Boeing is adding contract workers at the North Charleston, SC Boeing 787 plant

Boeing (Chicago) is adding hundreds of contract workers at its Boeing 787 North Charleston, South Carolina assembly plant to help deal with production problems according to the Wall Street Journal and The Post and Courier.

According to the WSJ, “Boeing is hiring more than 300 contract mechanics and inspectors immediately and could increase that number to between 500 and 1,000, according to three people familiar with the hiring. Those workers would assist the more than 7,000 people Boeing employed at the Charleston plant.”

Read the full report from The Post and Courier: CLICK HERE

Copyright Photo: Arisara Petersen. The production flight line at North Charleston. The Air India 787s are mainly assembled at Charleston.

Boeing to work with Etihad Airways and others to develop a sustainable aviation biofuel in the United Arab Emirates

Boeing (Chicago), Etihad Airways (Abu Dhabi), Takreer, Total and the Masdar Institute of Science and Technology today announced they will collaborate on a new initiative to support a sustainable aviation biofuel industry in the United Arab Emirates.

BIOjet Abu Dhabi: Flight Path to Sustainability will engage a broad range of stakeholders to develop a comprehensive framework for a U.A.E. biofuel supply chain. This initiative will focus on research and development and investments in feedstock production and refining capability in the U.A.E. and globally.

Etihad Airways showed the promise of this homegrown effort yesterday with a 45-minute demonstration flight in a Boeing 777 powered in part by U.A.E.-produced sustainable aviation biofuel. The biofuel was partially converted from plants by Total and refined into jet fuel by Takreer, a wholly-owned subsidiary of Abu Dhabi National Oil Co. (ADNOC). U.A.E. is now among a handful of countries that have produced and flown on their own aviation biofuel, which emits at least 50 percent less carbon dioxide than fossil fuel over its lifecycle.

Boeing and Etihad Airways are also among the founding partners of the Sustainable Bioenergy Research Consortium, hosted by the Masdar Institute in Abu Dhabi. The consortium has been researching and developing salt-tolerant plants that would be raw material for the same refining processes used to produce renewable fuel for the Etihad Airways flight.

The flight and BIOjet Abu Dhabi announcement lead into Abu Dhabi Sustainability Week and the World Future Energy Summit. These activities and Masdar Institute’s aviation biofuel research are aligned with the Abu Dhabi Economic Vision 2030, which seeks to develop sustainable energy sources to diversify the U.A.E. economy and increase workforce opportunities for Emiratis.

Etihad Airways is an airline industry leader in supporting the development of lower-carbon renewable fuels. A member of the Sustainable Aviation Fuel Users Group (SAFUG), the airline operated the Gulf region’s first biofuel flight in January 2011 with a Boeing 777 delivery from Seattle to Abu Dhabi powered by a blend of petroleum-based and certified plant oil-based jet fuel.

Boeing collaborates with airlines, research institutions, governments and other stakeholders to develop sustainable biofuel supply chains around the world, including the United States, Middle East, China,Brazil, Europe and Australia.

Copyright Photo: Michael B. Ing/AirlinersGallery.com. Etihad Airways’ Boeing 777-3FX ER A6-ETG (msn 39681) with special “Abu Dhabi Grand Prix 2014 Formula 1″ emblems arrives in Bangkok.

Etihad Airways: AG Slide Show

Boeing starts 777X high-speed wind tunnel tests

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Boeing (Chicago) has announced today that high-speed wind tunnel tests have started for the Boeing 777X. Testing began last week at Boeing’s Transonic Wind Tunnel in Seattle.

Last month, engineers started wind tunnel tests at QinetiQ’s facility in Farnborough, U.K., where testing of the low-speed performance of the airplane continues.

The data will help engineers with the configuration development of the airplane, validate computational fluid dynamics (CFD) predictions and support preliminary loads cycle development.

Subsequent rounds of low-speed and high-speed testing will provide further design refinement and validation of overall airplane performance predictions. Also, wind tunnel tests for noise, icing and propulsion are scheduled in the coming years.

Boeing continues to make progress on the 777X program and is on track to reach firm configuration in 2015. The 777X program has 280 orders and commitments from five customers worldwide.

Copyright Photo: Boeing.

Bloomberg Businessweek: Six Lessons learned from the Boeing-IAM 777X contract negotiations

Boeing logo

Boeing (Chicago), some would say, got what it wanted with the IAM. The new 777X will be built in the Puget Sound area as we have reported. The vote to keep the new airplane in the area passed by a narrow-51-49 percent vote. Boeing threatened to move the project away from the area and was courting offers from 22 states. The tactic worked. The victory for Boeing split the IAM over the issue of pensions versus having a contract and work. Some IAM member have now filed charges of unfair labor practices with the Department of Labor. Bloomberg Businessweek dissects the contract negotiations and the six lessons learned.

Read the full article: CLICK HERE

 

Boeing delivers 648 new airplanes in 2013, a new company record and 1,355 net commercial orders

Boeing (Chicago) set a company record in 2013 for the most commercial airplanes delivered in a single year with 648. The company’s unfilled commercial orders stood at 5,080 at the end of the year – also a new Boeing record.

Boeing also booked 1,531 gross commercial orders in 2013, a new company record and 1,355 net commercial orders in 2013, the second-largest number in company history.

In 2013, three programs set records for deliveries in single year:

  • The 737 program delivered 440 Next-Generation 737s
  • The 777 program delivered 98 airplanes
  • The 787 program delivered 65 Dreamliners, now flying with 16 customers around the world

With the higher production rates achieved in 2013, all three Boeing Commercial Airplanes production sites in Everett and Renton, Washington and North Charleston, South Carolina also delivered a record number of airplanes.

Boeing’s leadership position in the twin-aisle market continued in 2013 with the launch of two new airplane programs. The 777X launched in November at the Dubai Air Show with 259 orders and commitments worth more than $95 billion at list prices. Boeing also launched the 787-10 Dreamliner, the most fuel-efficient jetliner in history, at the Paris Air Show in June.

Orders, deliveries and unfilled orders as of December 31, 2013, by program were as follows:

Family Gross Orders Net Orders Deliveries Unfilled Orders
737 1,208 1,046 440 3,680
747 17 12 24 55
767 2 2 21 49
777 121 113 98 380
787 183 182 65 916
Total 1,531 1,355 648 5,080

Boeing Commercial Airplanes highlights in 2013 included:

  • Boeing Delivers 7,500th 737
  • Boeing, Southwest Airlines Announce Launch of 737 MAX 7
  • Boeing Opens New Everett Delivery Center
  • Boeing Delivers 1,000th Airplane to China
  • Boeing Launches 787-10 Dreamliner
  • Boeing Begins Assembly of 1st KC-46A Tanker Aircraft
  • Boeing Flies First 787-9 Dreamliner
  • Boeing Completes 737 MAX 8 Firm Configuration
  • Boeing to Increase 737 Production Rate in 2017
  • Boeing, GOL Airlines Announce Collaboration to Increase Sustainable Aviation Biofuel Supply in Brazil
  • Boeing 787 Dreamliner Reaches 1,000th Order with Etihad Airways
  • Boeing Launches 777X with Record-Breaking Orders and Commitments
  • Boeing Delivers First 747-8 with Performance-Improved Engines

Copyright Photo: Nick Dean/AirlinersGallery.com. Boeing 747-8R7F N747EX (msn 35808) lands at Paine Field near Renton.

Boeing brings the 787-9 to New Zealand, then on to Australia

 

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Boeing (Chicago) has flown the 787-9 Dreamliner to Auckland, home of launch customer Air New Zealand, marking the 787-9′s international debut and longest flight since the robust test program began.

 

The second of three 787-9s dedicated to the flight-test program, ZB002 flew direct from Seattle’s Boeing Field to Auckland International Airport, departing January 3 at 9:55 a.m. local time and landing (shown here) some 13 hours, 49 minutes later. The airplane is scheduled to continue on to Alice Springs,Australia, for testing in hot weather.

 

The 787-9 will complement and extend the super-efficient 787 family. With the fuselage stretched by 20 feet (6 meters) over the 787-8, the 787-9 will fly up to 40 more passengers an additional 300 nautical miles (555 km) with the same exceptional environmental performance — 20 percent less fuel use and 20 percent fewer emissions than similarly sized aircraft. The 787-9 leverages the visionary design of the 787-8, offering passengers features such as large windows, large stow bins, modern LED lighting, higher humidity, a lower cabin altitude, cleaner air and a smoother ride.

 

Boeing is on track to deliver the 787-9 to launch customer Air New Zealand in mid-2014. Twenty-six customers from around the world have ordered 402 787-9s, accounting for 39 percent of all 787 orders.

Copyright Photo: Boeing.

Air New Zealand: AG Slide Show

 

The Boeing 777X will be built in the Puget Sound, Washington area, IAM members approve Boeing’s offer

Lufthansa 777X (Boeing)(LR)

Boeing’s (Chicago) contract extension offer was approved by members of the International Association of Machinists & Aerospace Workers District 751 (IAM). Under the terms of the eight-year contract extension, the 777X and its composite wing will be built in the Puget Sound area by Boeing employees represented by the IAM. This work includes fuselage build, final assembly and major components fabrication such as interiors and wires.

“Thanks to this vote by our employees, the future of Boeing in the Puget Sound region has never looked brighter,” said Boeing Commercial Airplanes President and CEO Ray Conner. “We’re proud to say that together, we’ll build the world’s next great airplane—the 777X and its new wing – right here. This will put our workforce on the cutting edge of composite technology, while sustaining thousands of local jobs for years to come.”

Boeing was considering moving the 777X production out of the Seattle area and was considering offers from many other states.

Seattle-area IAM members to vote on Boeing’s last 777X contract offer on January 3

IAM logo

The International Association of Machinists and Aerospace Workers (IAM) has issued this short statement:

Members of the International Association of Machinists and Aerospace Workers (IAM) District 751, District W-24 and District 70 will vote January 3, 2014 on a revised proposal from the Boeing Company that would secure 777X production in the Puget Sound area.

Details of the revised offer will be provided by mail to IAM members and their families prior to the January 3 vote. The new proposal contains significant improvements over an earlier offer from Boeing that was rejected by IAM members on November 13, 2013.

The January 3 vote will take place at IAM Local union halls in Seattle, WA, Portland, OR and Wichita, KS, with results announced later that day.

Boeing to build a new training center in Russia, will buy back $10 billion of its stock

Boeing logo

Boeing (Chicago) has announced it will expand its flight and maintenance training capabilities in Russia with a new, state-of-the-art training campus.

The new full-service training facility— set to open in 2015—will be located in the Skolkovo Innovation Center in Moscow. Boeing will work in cooperation with Industrial Investors Group and their subsidiary Transas on the project.

Initial capability will include flight, maintenance and specialty training. Local maintenance training will be available across the spectrum of Boeing aircraft currently in operation, and flight training capability will include locally based instructors.

The new facility will open with four simulator bays, featuring three Next-Generation 737 full-flight simulators and one 777 full-flight simulator. Two of the simulators will be built by Transas. The facility is designed to allow for expansion to accommodate additional training capacity as required by customers.

Groundbreaking on the new training and research campus is scheduled for spring 2014, with training beginning in mid-2015.

The Boeing 2013 Pilot & Technician Outlook estimates that the Commonwealth of Independent States, including Russia, will require 15,200 new commercial airline pilots and 18,000 new technicians over the next two decades, supporting 1,530 new commercial airplanes by 2032. The new training campus in Russia is a significant investment in the region’s aviation safety, and will reduce travel times for airline crews and the costs of sending students for training.

Boeing Flight Services continually examines the global outlook for aviation training, and works to ensure training is available where it’s needed—near customers. In November, ground was broken on a new training facility in Korea. In August, Miami became the hub for pro forma flight training in the Americas— including 787 training —after the placement of additional flight simulators from Seattle. Three new simulators were also announced for the global training network in 2013: a third 787 full-flight simulator in London, and additional 777 and Next-Generation 737 simulators in Singapore.

In other news, Boeing Chairman, President and Chief Executive Jim McNerney announced Boeing’s board of directors authorized an additional $10 billion for the company’s share repurchase plan and declared that the company’s regular quarterly dividend will increase by approximately 50 percent to 73 cents per share.

The $10 billion repurchase authorization approved today is in addition to the approximately $0.8 billion remaining from the 2007 stock repurchase authorization. Repurchase activity for 2013 is complete and is expected to resume in January 2014.

The timing and volume of repurchases are at the discretion of Boeing management, however it is currently expected that the share repurchases will be made over the next two to three years. Repurchases may be made on the open market or in privately negotiated transactions.

The dividend declared today is payable March 7, 2014, to shareholders of record as of February 14, 2014.

Boeing to expand the North Charleston, South Carolina facility

Boeing (Chicago) announced it will begin construction in the second half of 2014 on a new paint facility on its main campus in North Charleston, South Carolina. The company expects to begin painting fully assembled 787 Dreamliners in South Carolina in mid-2016.

Boeing logo

The approximately 230,000 square-foot (21,368 m2) facility will be used to apply customer liveries to Boeing South Carolina (BSC)-built 787s. Today all BSC-built 787s are flown to Fort Worth, Texas, for final paint and then flown back to South Carolina for customer delivery.

The company also announced it acquired access to a total of 468 acres (189 hectares) in North Charleston, S.C., to protect for potential future growth in South Carolina through a long-term lease with Palmetto Railways, a division of the S.C. Department of Commerce. In addition to the 267 acres (108 hectares) sold by the Charleston County Aviation Authority, another 201 acres (81 hectares) of land in North Charleston were purchased with state bond funds allocated to Boeing. Owned by Palmetto Railways, the land will be leased to Boeing under a long- term lease. The company has an option to purchase all of the 468 acres (189 hectares) at the end of the initial lease term at the end of 2027.

“This expansion makes future growth in North Charleston possible. While we expect to begin the permitting process immediately for this property, we have no specific plans for the land other than where we will locate the new paint facility,” said Jones.

As part of the site expansion, beginning in January 2014, Boeing will construct a new 10,000 square-foot (929.03 m2) fully equipped fire station at its main campus, which is expected to be operational by late 2014. The company will add a second autoclave in 2016 to support aftbody composite fabrication for previously announced 787 program rate increases.

“We’ve been busy here in South Carolina this year,” said Jones. “Our BSC teammates have not only been ramping to rate in component and airplane production, but they’re doing it in the middle of construction zones. Our commitment to South Carolina is visibly demonstrated every day as our growth and expansion continues. I don’t expect that ending anytime soon.”

Since late 2012, Boeing has been expanding its main South Carolina site to create more efficiencies and capabilities in production to meet committed 787 build rates. Under previously announced expansion plans, the company is adding 391,000 square feet (36,325 m2) to its aftbody fabrication and assembly building; 42,000 square feet (3,901.9 m2) to its aft and midbody component paint facility; 67,000 square feet (6,224.5 m2) in office and meeting space to its final assembly building; and a new 94,000 square-foot (8,732.9 m2) Dreamlifter Operations Center, to be completed in the first quarter of 2014. The midbody component assembly facility is undergoing construction to add additional capacity and efficiency on the production floor.

In 2013, Boeing announced plans to establish IT Centers of Excellence and an Engineering Design Center, along with plans to build a new Propulsion facility in South Carolina. In November, Boeing broke ground on the new 220,000 square-foot (2,0439 m2) facility located in Palmetto Commerce Park in North Charleston (Ladson area) that will house its new 737-MAX propulsion assembly work, scheduled to begin in mid-2015.

Boeing is currently considering offers from 22 states for a possible site to build the proposed 777X airplane. South Carolina is probably one of those states. Is Charleston International Airport (CHS) the new Paine Field (PAE)?

Copyright Photo: Ken Petersen/AirlinersGallery.com. The Boeing flight line at CHS and the customer acceptance building.

Boeing issues a new statement concerning failed IAM talks in Puget Sound for the 777X, receives relocation proposals from 22 states

Boeing logo

Boeing (Chicago) has issued this statement concerning the contract extension discussions with the IAM for the Puget Sound (Seattle) area for the new 777X:

Boeing and the International Association of Machinists & Aerospace Workers District 751 have completed a third day of meetings following an attempt last month to secure a contract extension.

This afternoon, in response to a proposal presented yesterday by the union to secure 777X work in the Puget Sound region, Boeing presented a best and final counterproposal. That offer was rejected by the union leadership.

Boeing’s revised 8-year contract extension would have built on the company’s previous offer with substantial economic improvements. On top of the previous $10,000 signing bonus, employees would have received an additional lump sum bonus of $5,000. Employees also would have received additional dental benefits.

The proposal would have kept in place the current rate in which employees accelerate to the top of the pay scale – commonly referred to as “ZOOM.”

The company would have committed to placing final assembly of the 777X, as well as the fabrication and assembly of the airplane’s composite wing, at a Boeing location in the Puget Sound area. In addition, a separate agreement committing final assembly of the 737 MAX at the Renton, Washington site would have been extended through 2024.

As previously proposed, the long-term contract extension would have included changes to the way members earn future retirement benefits. Employees would keep everything they have accrued under the existing defined benefit plan and earn future benefits under a defined contribution plan with the new Special Company Retirement Contribution, starting November of 2016.

“We entered these discussions to address the concerns we were hearing from our employees,” said Ray Conner, president and CEO, Boeing Commercial Airplanes. “We’ve listened to the union leadership and had an open dialogue in hopes of moving toward each other. Unfortunately the offer, which would have ensured this great airplane for the Puget Sound region, was immediately rejected by the union leadership.”

The 777X site selection process has continued in parallel with this week’s IAM meetings. In an overwhelmingly strong response from interested participants, Boeing has received proposals from 22 states, many of which submitted multiple sites for consideration. A total of 54 sites are now being evaluated in the next critical stage of the process.

Who will now build the new 777X?

Boeing 777X Video:

 

 

 

 

 

 

Oops! Hint: When you are courting Boeing to stay in Washington State, it is always a good idea to use a photo of a Boeing aircraft (not Airbus)!

The Washington Aerospace Partnership through the Seattle Metropolitan Chamber of Commerce took out a full-page advertisement in the Wednesday Seattle Times. “The Future of Washington” ad made a pitch to keep the new 777X in Washington State (the machinist union recently voted down the proposed Boeing contract extension). Boeing is now actively looking at other lower-cost locations. There was only one problem with the ad created by an unspecified advertising agency: the ad featured an Airbus aircraft!

Read the full story (with a photo of the ad) from the Boeing Blog of The Seattle Times: CLICK HERE

Copyright Photo: Ken Petersen/AirlinersGallery.com. Note to the advertising agency: This is a Boeing 777, more specifically a 777-346 ER of Japan Airlines. Our worldwide team of photographers know quite well their aircraft and we always strive to get the best shots. We are always standing ready to help any advertising agency with the exact aircraft and the best, most dramatic shots. Contact us.

Meanwhile the issue continues. The machinists are fighting to preserve their pensions. Boeing under the 777X contract extension proposal wanted to freeze the pension benefits. Here is an opinion page article in the New York Times that presents the viewpoint of the Machinist rank and file members: CLICK HERE

Boeing knows in the new world order there is always someone ready to work for less, with less paid benefits and other cities and states (or countries) willing to welcome their lucrative and giant manufacturing program to their location with tax incentives. The cost of labor affects the final selling price. Every politician who wants to stay in office, fights for new jobs. Chicago-based Boeing is probably now factoring in the cost of moving, building new facilities and training new employees (like Airbus is doing in Mobile, Alabama) versus what it will take money-wise to get a new contract extension from the IAM. Although they are separate types of aircraft (wide body versus narrow body), the Seattle area machinists are really now competing against the Mobile area future aircraft assemblers for wages and benefits. They are also competing against future workers in Charleston in the right-to-work South Carolina should Boeing decide to expand that facility for the 777X. In reality, on a global scale, every worker today, doing the same type of work, is competing against a lower paid employee somewhere in the world. It is a global village.

There are tough decisions ahead for both sides.

Boeing flies the third 787-9

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Boeing (Chicago) yesterday (November 19) flew the third 787-9 Dreamliner, the first to be powered by General Electric GEnx engines. The third of three 787-9s dedicated to the test effort, ZB021 joined the fleet some two months from the inaugural flight of the first 787-9.

ZB021 took off from Paine Field in Everett, Washington, at 12:15 p.m. local time and landed 2 hours and 44 minutes later at Seattle’sBoeing Field. Boeing will use ZB021 to test engine performance as well as airplane handling characteristics such as low-speed performance and braking.

The 787-9 test program continues to make great progress. The fleet flies regularly, with the second airplane now in Florida for climatic testing, and has accumulated more than 180 flight hours and more than 60 flights. In addition to the three dedicated airplanes, Boeing also will conduct some testing on two production airplanes, the first of which is in final assembly in Everett. 787-10 development also is on plan.

Boeing is on track to deliver the 787-9 to launch customer Air New Zealand in mid-2014. 26 customers have ordered 396 787-9s, accounting for approximately 40 percent of all 787 orders.

Copyright Photo: Boeing.

Boeing launches the 777X today with orders from Lufthansa, Etihad Airways, Qatar Airways and Emirates

Boeing 777-9X (Boeing)(LR)

Boeing (Chicago) today formally launched the 777X program at the 2013 Dubai Airshow with a record-breaking number of customer orders and commitments for the newest member of its twin-aisle product family. Agreements for 259 airplanes from four customers across Europe and the Middle East provide a strong foundation to support development and production of the airplane.

Representing the largest product launch in commercial jetliner history by dollar value, 777X orders and commitments include Lufthansa with 34 airplanes; Etihad Airways with 25; Qatar Airways with 50 and Emirates with 150 airplanes. The combined value of the agreements is more than $95 billion at list prices.

The 777X builds on the passenger-preferred and market-leading 777, which today commands 55 percent of market share in its category in terms of backlog, and 71 percent of the in-service fleet worldwide. The 777X family includes the 777-8X and the 777-9X, both designed to respond to market needs and customer preferences.

The 777X builds on the best-in-class dispatch reliability from today’s 777, as well as offering more market coverage and revenue capability that surpasses the competition. The 777-8X competes directly with the A350-1000, while the 777-9X is in a class by itself.

Opening new growth opportunities for airlines, the 777-9X offers seating for more than 400 passengers, depending on an airline’s configuration choices. With a range of more than 8,200 nautical miles (15,185 km), the airplane will have the lowest operating cost per seat of any commercial airplane.

The second member of the family, the 777-8X, will be the most flexible jet in the world. The airplane will seat 350 passengers and offer an incredible range capability of more than 9,300 nautical miles (17,220 km). In addition, the airplane will have unmatched takeoff and payload capability compared to the competition.

The 777X introduces the latest technologies in multiple places, including the most advanced commercial engine ever – the GE9X by GE Aviation – and an all-new high-efficiency composite wing that has a longer span than today’s 777. The airplane’s folding, raked wingtip and optimized span deliver greater efficiency, significant fuel savings and complete airport gate compatibility.

Like the 787 Dreamliner which was launched as the 7E7, the 777X will be formally named at a later date. Design of the 777X is underway and suppliers will be named in the coming months. Production is set to begin in 2017, with first delivery targeted for 2020.

Boeing 777X Comparsion Chart

According to Reuters, Boeing will firm up the configuration of the aircraft in 2015 and plans to have a detailed design by 2016.

Production will begin in 2017, with the first test flight scheduled for 2019 and first delivery in 2020.

The Launch Customers:

Emirates 777X (Boeing)(LR)

Etihad 777X (Boeing)(LR)

Lufthansa 777X (Boeing)(LR)

Qatar 777X (Boeing)(LR)

Videos:

Reuters IAM Interview: “If Boeing wants to do a retest, talk to us. The ball is in their court.”

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The International Association of Machinists and Aerospace Workers (IAM), representing 31,000 Boeing workers in Washington State, as previously reported voted down the latest Boeing contract extension offer to build the proposed 777X in the Seattle area by a 2 to 1 margin. According to this interview and report by Reuters, IAM President R. Thomas Buffenbarger said it was up to Boeing to resubmit a new offer to the workers. The union chief voiced concern in the interview that work in the Seattle area will dwindle down after the current contract expires in 2016.

Several states are now putting together incentive packages to bring the 777X to their area. Boeing’s board had recently voted to speed up the the 777X. Boeing is likely to announce the formal launch of the new jet at Dubai Airshow with an order from Emirates.

Read the full report: CLICK HERE

Will the Boeing 777X be moved out of the Seattle area after the IAM members vote down a long-term contract extension?

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Boeing’s (Chicago) machinists rejected an eight-year labor contract extension yesterday that would have let Boeing build the company’s newest jetliner in Washington State. The IAM members voted down the extension by 67 percent. The extension would have secured an estimated 20 years of work building the proposed 777X. This vote may now permanently alter the relationship between Boeing and the Seattle area. The vote will now open a new opportunities for non-union areas like Charleston, South Carolina and other areas to build the new jetliner.

The driving issue for the union was the preservation of their pensions.

Boeing Commercial Airplanes quickly issued a statement from President and CEO Ray Conner after a long-term contract extension was voted down by the International Association of Machinists & Aerospace Workers District 751.

“We are very disappointed in the outcome of the union vote. Our goal was two-fold: to enable the 777X and its new composite wing to be produced in Puget Sound and to create a competitive structure to ensure that we continue market-leading pay, health care and retirement benefits while preserving jobs and our industrial base here in the region. But without the terms of this contract extension, we’re left with no choice but to open the process competitively and pursue all options for the 777X.

I’d like to thank Governor Jay Inslee and the Washington state legislature for all their efforts in this process. We had hoped for a different outcome.”

Read the analysis by Reuters: CLICK HERE

Boeing warns it will move the 777X project away from the Seattle area if the tentative agreement is rejected

Boeing (Chicago) has warned it will open negotiations with other communities if the tentative agreement with the IAM is rejected by the members on November 13. According to this report by Reuters, senior members of the IAM union were voicing opposition to the proposed contract.

Read the full report: CLICK HERE

In other news, Boeing reported the second 787-9 Dreamliner completed a successful 4-hour, 18-minute first flight yesterday. The airplane, known as ZB002, departed Paine Field in Everett, Washington, at 8:06 a.m. and landed at 12:24 p.m. local time at Seattle’s Boeing Field.

As the only 787-9 test airplane to be fitted with elements of the passenger interior, ZB002 will test systems such as the environmental control system in addition to avionics and other aspects of airplane performance. Boeing has conducted a series of ground tests on the second 787-9 since its completion in late September.

With manufacturing of the 787-9 flight-test fleet complete, the first production 787-9 in final assembly and 137 flight-test hours to date, 787-9 development is on track. 787-10 development also is progressing as planned.

First delivery of the 787-9 to launch customer Air New Zealand is set for mid-2014. Twenty-six customers have ordered 396 787-9s, accounting for 40 percent of all 787 orders.

Copyright Photo: Boeing.

IAM members to vote on a Boeing proposal to build the 777X wings and fuselage in the Puget Sound area

Boeing logo

Members of the International Association of Machinists and Aerospace Workers (IAM) District 751, District W-24 will vote on a proposal from the Boeing Company (Chicago)  that, if approved, would guarantee the Boeing 777X wings and fuselage will be built by IAM members in the Puget Sound.

In exchange for the 777X guarantee, Boeing proposes a new eight-year labor agreement that will expire in September 2024, providing an unprecedented degree of labor stability in the volatile and competitive industry.

“Securing the Boeing 777X for the Puget Sound means much more than job security for thousands of IAM members,” said District 751 Directing Business Representative Tom Wroblewski. “It means decades of economic activity for the region and will anchor the next generation of wide-body aircraft production right here in its historic birthplace and will complement the 737MAX narrow body.”

According to estimates, the 777X could mean as many as 10,000 direct and 10,000 indirect jobs in the immediate vicinity, with the project also serving as a long-term hub for advanced technology in electronics, avionics and composite technology required by the 777X.

The proposal by Boeing includes additional modifications to the current labor agreement, including cessation of pension accruals for current employees and the establishment of an alternative company-funded retirement plan. Additionally, within 30 days of ratification, all members would be paid a $10,000 signing bonus.

Full details of all changes in the proposal will be provided directly by District 751 and W-24 to IAM members as soon as printing can be completed. A schedule of ratification voting is also being prepared and will be communicated directly to IAM members.

“Only a project as significant as the 777X and the jobs it will bring to this region warrants consideration of the terms contained in Boeing’s proposal,” said Wroblewski. “While not all will agree with the proposal’s merits, we believe this is a debate and a decision that ultimately belongs to the members themselves.”

The IAM represents more than 35,000 Boeing workers and is among the largest industrial trade unions in North America.

Boeing has issued this statement:

Boeing Commercial Airplanes (BA) has issued a statement from President and CEO Ray Conner in response to International Association of Machinists & Aerospace Workers District 751′s decision to proceed with its efforts to secure a historic long-term contract extension that would result in locating final assembly of the new 777X and fabrication and assembly of the airplane’s wing in Puget Sound.”

“I want to congratulate IAM District 751 Directing Business Representative Tom Wroblewski for his leadership, vision and determination to forge an agreement of historic proportion that, when ratified, will secure and extend thousands of high-wage, high-skilled aerospace jobs and expanded economic opportunity for residents of Puget Sound and Portland for many years to come,” said Conner. “Tom and his team pressed hard for an agreement that maintains market-leading pay and benefits for the members he represents, while also recognizing the critical importance of our efforts to achieve increasing competitiveness in order to win against a growing list of global competitors.

“This is important to everyone with a stake in Boeing – including our employees, the community and our customers – and we look forward to the ratification and a long successful future as the global leader in aerospace,” Conner said.

Boeing to increase the 737 production rate in 2017 to 47 aircraft per month

Boeing logo

Boeing (Chicago) has announced the production on the 737 program will increase to 47 airplanes per month in 2017, the highest rate ever for the best-selling airliner in history. Once implemented, the 737 program will build more than 560 airplanes per year, and will have increased output by nearly 50 percent since 2010.

Boeing currently produces 38 airplanes per month from its Renton, Wash., factory and will increase the rate to 42 per month in the first half of 2014. First delivery of the 737 MAX is on track for third quarter of 2017.

 

Reuters: Boeing get commitments from China for around 200 737 MAX aircraft

Boeing logo

Boeing (Chicago) according to this report by Reuters, has secured around 200 737 MAX orders from China from various carriers.

Read the full report: CLICK HERE

Boeing downgrades the 747-8 production rate to 1.5 aircraft per month

Boeing (Chicago) has just announced that it will adjust the production rate for the 747-8 program from 1.75 airplanes to 1.5 airplanes per month through 2015 because of lower market demand for large passenger and freighter airplanes.

The company expects long-term average growth in the air cargo market to begin returning in 2014, and forecasts global demand for 760 large airplanes (such as the 747-8) over the next 20 years, valued at $280 billion.

The 747-8 family provides airlines with double-digit improvements in fuel efficiency, operating costs and emissions, while being 30 percent quieter and adding more capacity. To date, the 747-8 has accumulated 107 orders for passenger and cargo versions, 56 of which have been delivered.

The first delivery at the new production rate is expected in early 2014. The production rate change is not expected to have a significant financial impact.

Copyright Photo: Nick Dean/AirlinersGallery.com. Boeing 747-8KZF N50217 (JA12KZ) (msn 36137) climbs away from the runway at Paine Field near Everett, WA.

Reuters: JAL informed the Japanese government by e-mail it was switching to Airbus

JAL-Japan Airlines A350-900 and A350-1000 (11)(Flt)(Airbus)(LR)

JAL-Japan Airlines‘ (Tokyo) private corporate decision to order the Airbus A350 is sending shock waves through the Japanese aviation industry. According to report by Reuters, JAL informed the Japanese government it was switching to Airbus with a large order from Airbus for the A350 rather than the Boeing 777X with a simple e-mail at the time of the public announcement. Japanese companies and Boeing have a close business connection as Japanese companies are actively involved in Boeing projects. As a result, Boeing has always captured a large share of the Japanese market. This order has will undoubtedly change the dynamics between these Japanese companies and Boeing. ANA-All Nippon Airways (Tokyo) is fast approaching an order between Airbus and Boeing and is coming under political pressure to order Boeing long-haul aircraft. The Japanese government says it has a hands-off policy. Will Boeing lose again?

Meanwhile Boeing is revamping its marketing strategies (long overdue). Boeing has now lost a long list of airlines to Airbus. Boeing has only taken a few carriers away from Airbus. Embraer and to a lessor extent, Bombardier, are also taking a greater portion of the narrow body market.

Read the full article: CLICK HERE

JAL-Japan Airlines: AG Slide Show

The Boeing 787-9 completes its first flight

787-9 First Flight, originally uploaded by The Boeing Company.

The Boeing (Chicago) has issued the following statement:

The Boeing 787-9 Dreamliner took to the skies for the first time yesterday (September 17), beginning a comprehensive flight-test program leading to certification and delivery in mid-2014.

With its distinctive new Boeing livery, the newest member of the efficient 787 family completed a 5-hour, 16-minute flight, taking off from Paine Field in Everett, Washington, at 11:02 a.m. local time and landing at 4:18 p.m. at Seattle’s Boeing Field.

“Today’s first flight marks a significant milestone for our team, including our partners,” said Boeing Commercial Airplanes President and Chief Executive Officer Ray Conner. “We are tremendously proud to have our customers fly the 787-9 and look forward to delivery of the first airplane to Air New Zealand next year.”

During today’s flight, 787-9 Senior Project Pilot Mike Bryan and 787 Chief Pilot Randy Neville departed to the north, reaching an altitude of 20,400 feet (6,218 meters) and an airspeed of 250 knots, or about 288 miles (463 kilometers) per hour, customary for a first flight. While Capts. Bryan and Neville tested the airplane’s systems and structures, onboard equipment transmitted real-time data to a flight-test team on the ground in Seattle.

“We accomplished a lot in this flight, and it went really well,” said Bryan. “The 787-9 is a great jet and we wanted to just keep on flying.”
Powered by two Rolls-Royce Trent 1000 engines, the first 787-9 will be joined in flight test by two additional airplanes, one of which will feature General Electric GEnx engines. Those airplanes are in the final stages of assembly in Boeing’s Everett factory. Over the coming months, the fleet will be subjected to a variety of tests and conditions to demonstrate the safety and reliability of the airplane’s design.

The 787-9 will complement and extend the 787 family, offering airlines the ability to grow routes first opened with the 787-8. With the fuselage stretched by 20 feet (6 meters) over the 787-8, the 787-9 will carry 40 more passengers an additional 300 nautical miles (555 kilometers), with the same exceptional environmental performance — 20 percent less fuel use and 20 percent fewer emissions than similarly sized airplanes. The 787-9 leverages the visionary design of the 787-8, offering the features passengers prefer such as large, dimmable windows, large stow bins, modern LED lighting, higher humidity, a lower cabin altitude, cleaner air and a smoother ride.

Boeing is on track to deliver the 787-9 to launch customer Air New Zealand in mid-2014. Twenty-five customers from around the world have ordered 388 787-9s, accounting for 40 percent of all 787 orders.

Copyright Photo: Boeing.

Boeing forecasts China’s airline fleet to triple over the next 20 years

Boeing (Chicago), China’s leading provider of passenger airplanes, projects a demand for 5,580 new airplanes in China over the next 20 years valued at $780 billion. The company’s annual China Current Market Outlook forecasts the country’s fleet to triple in size over the next two decades.

Tourism in China and intra-Asia travel will help spur a strong demand for single-aisle airplanes, with total deliveries in that segment reaching 3,900 through 2032. Tinseth said both the Next-Generation 737 and the new 737 MAX offer significant advantages in improved capabilities, fuel efficiency and maintenance costs, as well as enhanced environmental performance.

Long-haul international traffic to and from China is forecasted to grow at an annual rate of 7.2 percent. The international growth is primarily driven by anticipated passenger traffic between China and North America, Europe, the Middle East, Oceania and Africa. This growth in the long-haul segment is expected to result in demand for an additional 1,440 new fuel-efficient widebodies, such as the 787 Dreamliner, 777 and 747-8 Intercontinental.

New Airplane Deliveries to China: 2013-2032

Airplane type Seats Total deliveries Dollar value
Regional jets 90 and below 240 $10B
Single-aisle 90-230 3,900 $370B
Small wide-body 200-300 730 $170B
Medium wide-body 300-400 610 $200B
Large wide-body 400 and above 100 $30B
Total 5,580

(16% of world total)

$780B

(16% of world total)

Boeing projects investments of $4.8 trillion worldwide for more than 35,000 new commercial airplanes to be delivered during the next 20 years. The complete forecast is available at www.boeing.com/commercial/cmo/index.html.  China accounts for approximately 16 percent of the total demand in terms of both new deliveries and market value.

Top and Bottom Copyright Photos: Ivan K. Nishimura/Blue Wave Group. China Southern Airlines‘ Boeing 737-71B B-5283 (msn 38919), the 4,000th Next Generation 737, passes through Honolulu on its long delivery flight to China.

China Southern Airlines: AG Slide Show

 

Boeing opens a 787 training facility at its Miami campus

Boeing Miami-Rick Scott (Boeing)(LR)

Boeing (Chicago) yesterday (August 29) marked the launch of 787 customer training in Miami, site of the company’s largest commercial aviation training campus. AeroMexico (Mexico City) and LAN Airlines (Santiago) are the first two customers to train on the 787 suites at the Boeing Flight Services Miami campus.

Boeing has greatly enhanced its overall training capability in Florida following an announcement in March 2013 that the company would relocate training devices from Seattle to Miami. To better serve airlines and meet growing personnel training requirements, two 787 full-flight simulators are now located at the Miami campus as well as an additional Next-Generation 737 full-flight simulator and 717, 747 and 767 simulators. An additional 777 simulator will locate in Miami later this year. These seven devices will bring total capability in Miami to 17 full-flight simulators across airplane types, making the campus one of the largest commercial flight training facilities in the world.

According to Boeing, “the consolidation of Boeing flight training campuses in the Americas is designed to bring training closer to where customers operate, reducing travel times for airline crews and the costs of sending students for training. Miami is an international hub for commercial aviation training and provides geographic diversity within the framework of Boeing’s global commercial training network – and convenience that airlines prefer.”

Boeing Flight Services, a business unit of Commercial Aviation Services, operates a geographically diverse network of 20 flight and maintenance training campuses on six continents. In addition to Miami, Boeing offers 787 training in strategically located campuses in Singapore, Shanghai and London.

Top Copyright Photo: Boeing. At the opening event attended by Florida Governor Rick Scott as well as a number of other federal, state and local officials, community leaders and airline customers, Boeing also established Miami as its pro forma flight training campus for the Americas — the location where airline crews will receive the initial training provided to Boeing customers for new model airplane introductions. Florida Governor Rick Scott (left) and Sherry Carbary, vice president, Boeing Flight Services (right) are seen inside the 787 simulator at the Miami campus.

Bottom Copyright Photo: Boeing. Pictured here is the advanced 787 full-flight simulator at the Miami campus.

Boeing Miami 787 Simulator (Boeing)(LR)

Boeing asks its customers to check its Honeywell ELT beacons

Boeing logo

Boeing (Chicago) is asking all operators of around 1,200 Boeing aircraft to inspect the Honeywell ELT devices on board the aircraft. According to this report by Reuters, “Boeing is asking specific operators of 717, Next-Generation 737, 747-400, 767 and 777s to inspect aircraft with the Honeywell fixed emergency locator transmitters,” a Boeing spokesman said in an emailed statement sent late yesterday. Airbus is also reviewing its ELTs made by Honeywell.

Honeywell logo

The action comes as a result of the findings of the fire in a Honeywell ELT on board a parked Ethiopian Airlines Boeing 787-8 at London’s Heathrow Airport.

Read the full report: CLICK HERE

Honeywell ELT

Qatar Airways grounds one Boeing 787-8 for a “minor” technical issue

Qatar Airways (Doha) stated yesterday (July 26) it had taken one of its Boeing 787-8 out of service for a “minor” technical issue according to this report by Reuters. New pressure is mounting on Boeing over possible new electrical problems.

The airline and Boeing declined to give further details but industry sources said they were treating seriously reports that the aircraft had been grounded for days after smoke was seen near an electrical panel according to the report.

Read the full report: CLICK HERE

Copyright Photo: Nick Dean/AirlinersGallery.com. Newly-manufactured Boeing 787-8 A7-BCE (msn 38323) is pictured leaving Paine Field near Everett, WA yesterday (July 26) on delivery.

Qatar Airways: AG Slide Show

Boeing’s first 787-9 features a new livery

Boeing (Chicago) continues to make progress on the first 787-9 Dreamliner, which also has become the first 787 to don the new Boeing Commercial Airplanes livery. The airplane has just rolled out of the paint hangar.

This refreshed look for the Boeing family began with the 747-8 and evolved with the 737 MAX. The new livery retains many of the features of the original 787-8 livery, adding a prominent number on the tail to help distinguish among models within the same product family.

The 787-9 will complement and extend the 787 family, offering airlines the ability to grow routes opened with the 787-8. With the fuselage stretched by 20 feet (6 meters), the 787-9 will carry 40 more passengers an additional 300 nautical miles (555 kilometers), with 20 percent less fuel use and 20 percent fewer emissions than similarly sized airplanes. The 787-9 leverages the visionary design of the 787-8, offering the features passengers prefer such as large, dimmable windows, large stow bins, modern LED lighting, higher humidity, a lower cabin altitude, cleaner air and a smoother ride.

Boeing is on track to roll out and fly the 787-9, currently in final production, in late summer. First delivery to launch customer Air New Zealand is set for mid-2014.

Copyright Photo: Boeing.

Despite 787 problems, Boeing reports strong Second Quarter financial results

Boeing logo

The Boeing Company (Chicago) reported second-quarter core earnings per share (non-GAAP) increased 13 percent* to $1.67, driven by strong performance across the company’s businesses (Table 1). Second-quarter core operating earnings (non-GAAP) also increased 13 percent* to $2.0 billion from the same period of the prior year. Second-quarter revenue was $21.8 billion, GAAP earnings from operations was $1.7 billion and earnings per share was $1.41. Core earnings per share guidance increased to between $6.20 and $6.40 and GAAP earnings per share guidance increased to between $5.10 and $5.30, reflecting the strong performance. The company also increased its revenue guidance to between $83 and $86 billion on higher Defense, Space & Security revenues, and reaffirmed its 2013 operating cash flow outlook.

Second Quarter Financial Results:

  • Core EPS (non-GAAP)* rose 13 percent to $1.67 on strong operating performance; GAAP EPS of $1.41
  • Revenue increased 9 percent to $21.8 billion reflecting higher deliveries on the 787 and 737 programs
  • Backlog grew to a record $410 billion, including $40 billion of net orders during the quarter
  • Operating cash flow before pension contributions* more than doubled to $3.5 billion
  • 2013 Core EPS guidance increased to between $6.20 and $6.40; GAAP EPS to between $5.10 and $5.30

* Non-GAAP measures (core operating earnings, core operating margin and core earnings per share) exclude certain components of pension and post retirement benefit expense that the company believes are not reflective of underlying business performance. Complete definitions of Boeing’s non-GAAP measures begin on page 6, “Non-GAAP Measures Disclosures.”

Boeing completes the 737 MAX 8 configuration

Boeing 737 MAX (Flt)(Boeing)(LR)

Boeing (Chicago) has completed the firm configuration of the 737 MAX 8. This milestone marks completion of the major trade studies that define the capabilities of the 737 MAX family.

As detailed designs are completed and released, production can begin. Final assembly of the 737 MAX 8 is scheduled to begin in 2015 with first delivery scheduled for the third quarter of 2017.

The 737 MAX will be 13 percent more fuel-efficient than today’s most efficient single-aisle airplanes and 8 percent more fuel-efficient per seat than tomorrow’s competition. The configuration includes new LEAP-1B engines from CFM International that are optimized for the 737 MAX, a redesigned tail cone and the Boeing designed Advanced Technology Winglet to reduce fuel use. Other changes incorporated include upgrades to the flight deck displays, an electronic bleed air system and fly-by-wire spoiler flight controls.

The 737 MAX family includes the 737 MAX 7, 737 MAX 8 and 737 MAX 9 and will serve the 100- to over 200-seat market. The 737 MAX will extend the Next-Generation 737 range advantage with the capability to fly more than 3,500 nautical miles (6,482 km), an increase of 400-540 nmi (741-1,000 km) over the Next-Generation 737. First delivery of the 737 MAX 9 is planned for 2018 followed by first delivery of the MAX 7 in 2019.

To date, the 737 MAX has accumulated orders for 1,495 airplanes.

Image: Boeing.

The first Boeing 787-9 is rolled out of the Paine Field assembly plant

Boeing logo

Boeing (Chicago) has rolled out the first Boeing 787-9. The 787-8 Dreamliner can carry 210 – 250 passengers on routes of 7,650 to 8,200 nautical miles (14,200 to 15,200 km), while the longer 787-9 Dreamliner will carry 250 – 290 passengers on routes of 8,000 to 8,500 nautical miles (14,800 to 15,750 km).

According to Wikipedia, the 787-9 will be the first variant of the 787 with a “stretched” or lengthened fuselage that is 206 feet (63 m) long. This variant differs from the 787-8 in several ways, including structural strengthening, a lengthened fuselage, a higher fuel capacity, a higher maximum take-off weight (MTOW), but with the same wingspan as the 787-8. When launched, the 787-9 had the same fuel capacity as the 787-8. The design differences meant higher weight and resulted in a slightly shorter range than the 787-8. After further consultation with airlines, design changes were incorporated to add a forward tank to increase its fuel capacity, so it has a longer range and a higher MTOW than the 787-8. Air New Zealand is the launch customer for the 787-9.

Video:

Boeing leases additional 717s to QANTAS Link and Volotea

Boeing’ (Chicago) leasing unit, Boeing Capital Corporation, announced additional deployments of 717s.

Australia’s largest regional airline, QANTAS Link, will receive an additional five leased 717s to add to its existing fleet of 13 of the twinjets that operate across Australia. Those deliveries will begin in late 2013 after the aircraft are refitted with upgraded interiors to include a full business class experience and new in-flight entertainment systems. The QANTAS Group has operated the 717s since 2002.

The 717s will be deployed on the Sydney-Canberra, Brisbane-Canberra and Melbourne-Canberra routes.

In Europe, startup carrier, Volotea (Barcelona and Venice), will increase its 717 fleet (below) in 2013 to a total 15 as it continues to develop its business model of offering point-to-point service to passengers between medium and small-sized European cities. Volotea began operations on April 5, 2012 with a network built around the 717 that is supported by a comprehensive Boeing solution for operations and training.

Volotea recently surpassed the million passenger mark enabled by its operation from 52 European airports, currently serving 97 city pairs.

There are more than 150 Boeing 717s in service today since the first airplane was delivered in 1999. The twinjet’s technology and fleet performance have earned it the distinction of being the world’s best jetliner serving the 100-passenger airline market.

Top Copyright Photo: Micheil Keegan/AirlinersGallery.com. Operated by Cobham Aviation Services Australia for QANTAS, Boeing 717-2K9 VH-NXH (msn 55055) prepares to land in Perth, Western Australia.

QANTAS Link-Cobham: AG Slide Show

Volotea: AG Slide Show

Bottom Copyright Photo: Keith Burton/AirlinersGallery.com. Boeing 717-2BL EI-EWI (msn 55170) climbs away from Southend after maintenance.

Flight demonstrations videos from the Paris Air Show

The 2013 50th International Paris Air Show at Le Bourget Airport is winding down for the manufacturers. We have been reporting this week on all of the order announcements.

Paris Air Show 2013 logo

There were several airliner flight demonstrations. Here is a sample:

Dueling Videos:

Boeing demonstrated an Air India 787-8 Dreamliner at Paris:

Airbus demonstrated an A380 bound for British Airways at Paris:

Copyright Photo: Marcelo F. De Biasi/AirlinersGallery.com. Airbus A380-841 F-WWDD (msn 004) “Own the sky” also performed at the show.

 

Boeing Accelerates First Delivery of 737 MAX, cockpit revealed

Boeing 737 MAX Cockpit (Boeing)(LR)

Boeing (Chicago) announced today that first delivery of the 737 MAX 8 to launch customer Southwest Airlines (Dallas) will be a quarter earlier than originally scheduled – in the third quarter of 2017 instead of fourth quarter.

“Through our disciplined development on the 737 MAX program, the team has retired key technology risks,” said Scott Fancher, vice president and general manager, Airplane Development, Boeing Commercial Airplanes, during a briefing at the 2013 Paris Air Show. “We have informed our customers and they are pleased they will be able to put these more fuel-efficient airplanes in their fleets sooner than planned.”

Since launch in August 2011, the 737 MAX team has worked to define the final configuration of the airplane including new LEAP-1B engines from CFM International, a redesigned tail cone and the Advanced Technology winglet. Testing in the wind tunnel and data analysis prove that the 737 MAX configuration, set to be final in July, will give customers a 13 percent fuel-burn improvement over today’s most fuel efficient single-aisle airplanes.

The work done by Boeing has enabled the program to accelerate the 737 MAX schedule. “We continue to follow our knowledge points through the development process and we have an executable plan. Testing, improvement workshops, and solid early data have allowed us to validate the airplane’s performance and move the schedule forward,” said Fancher.

Image: Boeing. The Boeing 737 MAX will feature new large-format flight deck displays supplied by Rockwell Collins. The new displays will deliver enhanced visuals, improved reliability, lower spares and maintenance costs, lower weight and lower upgrade costs over the life of the airplane. The flight deck layout will maintain operational commonality with the Next-Generation 737 on entry-into-service of the 737 MAX while preparing the airplane for future flight deck capabilities.

Pictured here is an artist’s rendering of the 737 MAX flight deck with the four new large format displays.

Boeing launches the 787-10, ALC, GECAS, IAG-British Airways, Singapore Airlines and United Airlines place orders

Boeing 787-10 Ad (Boeing)(LR)

Boeing (Chicago) announced today at the 2013 Paris Airshow that it has launched the 787-10 Dreamliner, the third member of the super-efficient 787 family. Commitments for 102 airplanes from five customers across Europe, Asia and North America provide a strong foundation to support development and production of the newest Dreamliner.

Customer launch commitments for the 787-10 include Air Lease Corporation, with 30 airplanes; GE Capital Aviation Services, with 10; International Airlines Group / British Airways, with 12 subject to shareholder approval; Singapore Airlines, with 30 and United Airlines, with 20 airplanes.

The new 787-10 will fly up to 7,000 nautical miles (12,964 km) — covering more than 90 percent of the world’s twin-aisle routes — with seating for 300-330 passengers, depending on an airline’s configuration choices. The second member of the family, the 787-9, is in final assembly in Everett, Wash., and is set to make its first flight later this year.

“The 787-10 Dreamliner will be the most-efficient jetliner in history. The airplane’s operating economics are unmatched and it has all the incredible passenger-pleasing features that set the 787 family apart as truly special,” said Boeing Commercial Airplanes President and CEO Ray Conner. “The 787-10 is 25 percent more efficient than airplanes of its size today and more than 10 percent better than anything being offered by the competition for the future.”

Design of the 787-10 has already started at Boeing, and international partners will be involved in detailed design in the months ahead. Final assembly and flight test of the 787-10 are set to begin in 2017, with first delivery targeted for 2018.

“Our ongoing investment in the 787 family is well-founded,” said Conner.  “With the 787-10, we’ve designed an exceptional airplane supported by an efficient and integrated production system that can meet increasing demands and create new opportunities for us. Our team and our customers are excited about growing the product line and expanding our presence with this family of airplanes.”

The 787 family’s unique interior offers passengers technologies that make their flights more enjoyable, including large, dimmable windows; cleaner air; higher humidity; lower cabin altitude; bigger stowage bins; soothing LED lighting and a smoother ride. The 787-10 will share a common type rating not only with the 787-8 and 787-9 but also with the popular Boeing 777, giving airlines additional flexibility in scheduling and training flight crews.

United logo-1

United Airlines issued this statement:

United Airlines today increased its 787 Dreamliner order to 65 aircraft (including six previously delivered aircraft) with an order for 20 787-10s.United is the North American launch customer for the 787-10 and it expects delivery of its first aircraft in 2018. United ordered 10 incremental 787-10 aircraft and will convert 10 existing 787s on order to 787-10s, enabling the airline to further modernize its international widebody fleet by replacing older, less efficient aircraft. The advanced technology and composite construction of the 787 reduce fuel burn and carbon emissions, while providing a superior customer experience.

United is currently the only U.S. airline to operate the 787. United has six new 787-8 aircraft in service and had previous orders for an additional 49 Dreamliners consisting of both the -8 and -9 variants. The 787-10 is a stretched version of the 787-9 and will offer the lowest fuel burn per seat of any aircraft in its size category. The 787 offers up to 20 percent better fuel efficiency per seat than similarly sized aircraft, due in part to the more than 50 percent composite makeup of its structure. The 787 also boasts an enhanced inflight experience including larger windows, larger overhead bins and lower cabin altitude with enhanced ventilation systems that reduce the effects of jet lag.

The 787-10 order is the latest in United’s commitment to improve the efficiency of its fleet. In July of last year, United announced a narrowbody order for 100 Boeing 737 MAX 9 aircraft and 50 Boeing 737-900ER aircraft. In addition, United has an order for 25 Airbus A350 aircraft. The airline is also modernizing its United Express fleet by adding 70 76-seat Embraer aircraft that will be operated by United Express regional partners.

Images: Boeing.

Boeing 787-10 (Boeing)(LR)

Boeing, GECAS announce a commitment for 10 787-10X Dreamliners

GECAS logo-1

Boeing (Chicago) and GE Capital Aviation Services (GECAS) (Stamford), the commercial aircraft leasing and financing arm of General Electric (GE), announced today at the 2013 Paris Air Show a commitment to order 10 787-10X Dreamliners equipped with state-of-art GEnx engines, subject to the 787-10 program launch.

Boeing looks forward to working with GECAS to finalize the details of the agreement, at which time the airplanes will be posted to the Boeing Orders & Deliveries website as a firm order.

“We have studied the capabilities Boeing is developing for the 787-10X and anticipate strong demand from our airline customers for this airplane,” said GECAS President and CEO Norman C.T. Liu. “The 787-10X will be a perfect complement to our broad portfolio of modern, fuel-efficient aircraft offering the lowest operating costs in the market.”

Boeing has been working closely with airline and leasing customers to define the key capabilities and features of 787-10X, which would be the third and largest member of the 787 family. The 787-10X under consideration would add approximately 15 percent passenger capacity over the 787-9 with superior fuel efficiency to serve medium and long-haul markets.

Once finalized, these 787s will bring the total number of airplanes GECAS has ordered from Boeing to 598 since 1995, including 737s, 747s, 757s, 767s and 777s. To date, GECAS has taken delivery of 444 of the airplanes.

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