January 2008 Archives


Boeing posted record earnings, revenues, and backlog in 2007. You can check out the results for 4Q and full-year 2007 in our news release (PDF).

Northern exposure

STOCKHOLM - I’m in the middle of a two-week tour of European cities, and just wrapped up a visit to Sweden. Enjoyed some beautiful sunshine, although this time of year the sun barely gets above the horizon all day!


Blue skies, short days in Stockholm.

I met with a small group of reporters here, and fielded a number of questions about the sustainability of our industry. There was lots of interest in the fuel efficiency of our airplanes. And I talked a bit about our efforts to invest in new technologies.

Late last week I spent a few days in Dublin, at the 10th Annual European Airfinance Conference. At the conference I was part of the always popular Airbus/Boeing panel discussion. It was standing room only. My guess would be around 600 people in the crowd - bankers, financiers, airline representatives and others.

I’d say the mood I’ve observed so far in Europe is upbeat and confident. But everyone is watching things closely, and there’s concern about the direction of the U.S. economy.

Word I’m getting from airlines is that they see their business as being strong for the foreseeable future - especially for international service. Financiers are indicating that money is available, but, as they put it, at a higher cost, due to the “U.S. credit crunch.”

I wanted to share with you some of the “burning questions” I’ve heard that sort of typify what’s on the minds of people here in Europe:

When will a 737 “replacement” airplane enter service?

Will the U.S. economy go into recession, and what would that mean for the rest of the world?

What about consolidation in the U.S. and Europe - who and when – and how will alliances be affected?

Are we at the peak of the cycle?

What are the new technologies, if any, in the A350?

When will the 787 fly?

Will the A380 be a market success?

Will the 747-8 Intercontinental be a success?

I’m off to Warsaw next, and then to Moscow. And in about a month I’ll be returning to a similar crowd here in Europe for the 22nd Annual Geneva Forum. It will be interesting to see the state of our industry at that time, whether the questions are the same, and whether there’s been a change in sentiment one month from now.

Getting it right

I haven’t blogged specifically on the subject of aviation safety – and neither had the “other” Randy. That probably says as much as anything about the high level of safety in our global air transportation system.

But there is definitely a lot of curiosity right now about what a major airplane manufacturer does in the aftermath of an airplane accident or serious incident. So this is a good time to talk about it briefly.

The first thing we at Boeing do after learning of an accident is react like most everyone else - with shock and sadness when there is a loss of life or serious injuries, or with a sense of relief when we learn that the passengers and crew are safe.

But we also immediately mobilize the Boeing resources that may be required if we’re invited to participate – and when it’s one of our airplanes, we usually are. It’s important to point out that Boeing does not lead accident investigations, but we do have special knowledge and expertise that can be very valuable to government investigators.

Our colleagues in the industry who manufacture engines, avionics, and components also expect to be called on to assist investigations, as do airlines, pilot organizations, and others. There are internationally agreed-upon procedures for airplane accident investigations, as set out by the International Civil Aviation Organization (ICAO).

Under ICAO rules the investigative authority of the country in which an accident occurs takes the lead and determines who participates.

Normally, that agency will invite the U.S. accident-investigation authority, the National Transportation Safety Board, to put together an assistance team, and we are asked to join that team if one of our airplanes is involved. Similarly, our colleagues at Airbus would join a team formed by the Bureau d’Enquêtes et d’Analyses pour la sécurité de l’aviation civile.


Flight data units: A Digital Flight Data Acquisition Unit, or DFDAU (left), and Flight Data Recorder, or FDR (right). The FDR is considered one of the “black boxes” on a commercial airplane, but is typically painted bright orange.

Those of you who follow these investigations know that they can be like puzzles – you first need to gather the relevant information and then try to figure out what happened.

The “black boxes” - the flight-data and cockpit-voice recorders - are tools to show what the airplane was doing and how other systems were working up to the time of the event.

Of course, as you also know, airplanes are made up of very complex systems, and investigations can seem to go on for quite some time. But you have to keep in mind that even when the answers seem obvious, each clue has to be studied against the whole.

Clearly, everyone who has a hand in the global aviation system wants to find the answers that will prevent a re-occurrence. So, if the investigation finds something that needs a closer look, we ask operators to check the worldwide fleet to see if anyone else has experienced the same event, or something similar.

All the data gathered during an investigation is checked to make sure investigators have the right answer or answers. Boeing’s role is to provide our expertise on the overall performance of the airplane, how the airplane systems work, how their structures are designed and built, and how they interact.

But again, it’s up to the investigative authority to ultimately solve the puzzle. In today’s world we often expect instant answers. And in that light, the investigative process seems ponderous. But you wouldn’t want it any other way, because the end result is a safer aviation system for everyone.

Dreamliners over Bahrain

Over the weekend Boeing finalized an order with Bahrain’s national carrier for up to 24 787 Dreamliners. Not only is the order great news, but Boeing released a cool new image to go along with it.


A new Gulf Air 787 flies over Manama, the capital city of Bahrain, in this remarkable rendering.

The agreement with Gulf Air is for 16 787s, with purchase rights for eight additional airplanes. Gulf Air selected the Dreamliner to be the core of their fleet for the next generation – increasing both their fleet’s efficiency and profitability. And I’d add that it’s great to see Boeing and the 787 continuing as an integral part of the growth in the Middle East.

By the way, with the Gulf Air order, the 787 program now has a total of 857 orders from 56 customers - the fastest-selling new airplane program in history.

Orders and commitments

Clearly there were two big stories in aviation today, the announcement of Airbus’ 2007 results, and Boeing’s announcement of 787 delays.

About the 2007 orders story, as you’ve probably read by now, Airbus had 1,341 net orders last year, compared to Boeing’s previously announced year-end total of 1,413 net orders. The Airbus gross total was 1,458 orders and the Boeing gross total was 1,423 orders.

Today’s Airbus announcement, combined with Boeing’s release earlier this month, provides a really good sense of the orders picture in 2007.

And what I take away from all this is that 2007 was an incredibly strong orders year for our industry. Perhaps that’s an understatement. Between our two companies we had more than 2,750 orders. And we’ve seen our combined unfilled orders grow to more than 6,800 airplanes.

So why was last year such a good year? A number of factors aligned. We’ve seen strong fundamentals across our industry now for three years – strong economic growth, passenger traffic, revenue, and airline profitability. All those wonderful factors have led to unprecedented demand for new commercial airplanes.

The other part of the equation, of course, has been the development of new, extraordinarily fuel efficient airplanes such as the 787 Dreamliner. The availability of these airplanes has resulted in airlines wanting to replace older, less fuel efficient aircraft in light of high oil prices.

Looking at Boeing’s roster of unfilled orders, it is balanced by region, by airline business model, and airplane type. We like where we stand.

Now, on to the 787. As you can guess, we’re all disappointed that we’ve had a delay in the program. We now expect first flight around the end of the second quarter.


Dreamliner mural at Sea-Tac International Airport: Boeing remains committed to delivering this breakthrough airplane.

We’re working hard on the new schedule, and we’re working with our customers and our manufacturing team to better understand how this will impact deliveries. We should know more about that around the end of the first quarter.

But as I read through some of what’s been written today about the latest 787 news, I want to emphasize that we’ve made a lot of progress. And as Scott Carson said this morning, we’re committed to flying, certifying, and delivering the 787 as soon as possible. Yes, we have a lot of work to do. And as we move farther along, our confidence in this airplane has only increased.

We’ve acknowledged all along that building new airplanes is really challenging. But we’ve solved tough start-up issues before - as has our competition. We know from experience that the bottom line is to deliver an airplane that gives our customers a new level of performance, efficiency, and passenger experience. And that’s how we’ll ultimately be judged.

We’re committed to bringing to the market an airplane that will really transform the industry, a truly game-changing airplane.

At the Airbus year-end announcement today, it was mentioned that the latest 787 news reinforces just how complex aircraft manufacturing is and why there are only two successful producers of large commercial aircraft in the world. I think that says it pretty well.

Amazing race

This is one of those events that falls under the category of “don’t try this at home.” Check out the story.

Great year, new year

Happy 2008! It’s great to be back in the office. And I’m looking forward to a very busy year.

We’ve compiled our BCA year-end orders for 2007, and as expected it was a record-breaker in many ways. With 1,413 net orders, we’ve exceeded the 1,000 mark for an industry-record three years in a row.


A British Airways order for 24 Dreamliners, finalized last week, included the 787th order for the 787. Total orders for the program since launch now stand at 817.

We saw new records, too, for the 737 and 787 Dreamliner programs, as well as for Boeing freighters. The Dreamliner, already the fastest-selling new airplane program in history, had 369 orders last year, setting an industry record for most sales in a single year for any widebody commercial airplane.

Of course, a sincere “thank you” is in order to all of our customers. From airlines to cargo carriers, leasing companies, and private customers, it’s their endorsement of Boeing’s products and services that have made it happen.

It was a great year, but no doubt, not without its challenges. And we’ve got a lot of hard work to accomplish this coming year.

In the meantime, check out our Orders and Deliveries page for the breakdown. And we’ll talk later about what it all means.


More posts