On target

As has been my tradition these past couple of years, I just took a look back at our post from this time last January. Here’s what I said then:

I don’t think there’s any need to “sugar-coat” the outlook for 2009 and beyond. It’s going to be tough, challenging, difficult ..

I guess we just about nailed that one, huh? In that same post I hinted that 2009 would be one for the history books, and that it certainly was.

On the positive side, we did achieve some of the significant milestones that were on the horizon for us one year ago – first delivery of the 777 Freighter, 787 first flight and commencement of flight test, and final assembly and factory completion of the 747-8 Freighter as that airplane gets ready for its first flight.

image/photo

Into a gorgeous sunset for the 787 as flight tests continue into 2010.

In terms of year-end orders and deliveries, we’ve just released those numbers. You can take a look at the details here and here. For me, the key takeaways from our year-end 2009 numbers are that we met our delivery target for commercial airplanes and our core manufacturing business is running extremely well.

During 2009 we delivered 481 airplanes to customers, which is within our announced guidance of 480 to 485 deliveries for 2009. And we retain a strong backlog of 3,375 airplanes.

To no one’s surprise, the challenges of 2009 were reflected in our order totals. But we did have a strong year once again for the Next-Generation 737, and a significant order towards the end of the year for the 747-8 Intercontinental.

I did some media interviews on Thursday, and when asked about the future by a number of reporters I told them couple of things. First, we don’t give guidance until we do our 4th quarter earnings later in the month. However, we do expect – as I’ve said before - 2010 will be a year of economic recovery, while 2011 will be a year in which airlines recover. Which means that in 2012 we should see an increase in airplane demand.

On another issue, you may have noticed reflected on our orders Web site that our good customer ANA has opted to convert their 787-3 orders into other models. Simply put, getting aircraft into their hands for earlier delivery was a better solution for them.

As a result there are no longer any 787-3 orders in the backlog. Going forward, we’ll continue to assess the market viability of the -3.

By the way, the ANA order conversion does not impact the overall 787 order count. As of January 7, the 787 Dreamliner has a total of 851 orders from 56 customers.

Comments (12)

Don Harrington (Bellevue, WA):

I'm not sure which is more beautiful, the sunset or the plane flying into it. Truly a wonderful picture.

Here's looking forward to continued success in the 787 flight testing and the start of 747-8 flights!

Chris C (South Africa):

The -8F and 777F will be the cornerstone and benchmark of the large airplane freighter market for decades to come, and once the air-freight traffic starts recovering well, we’ll see additional 777F and -8F orders flood in as airlines will need to operate these hugely capable and efficient airplanes. Already, with 76 -8Fs sold and 68 777Fs sold, that’s a simply stupendous start to filling the requirement of 490 new built production freighters, with a payload of 80,000kg or more, for the next 20 years.

I’m of the firm belief that the -8F will be the pinnacle of the large freighter market, and that belief is supported by the -8Fs stellar capabilities and economics.

Indeed, near the close of 2009 it was an extremely exciting and significant time. The firm order for 5 747-8Is from Korean Air, the first flight of the super-efficient 787 Dreamliner, and securing 11 new 787 orders were all significant milestones to finish a year off with. Further, to deliver 481 airplanes during the period or year when, arguably, the global economic recession was at its worst is incredible. Well Done, that’s an achievement to be very proud of.

I guess Airbus would have also delivered around the same amount of airplanes (probably slightly more), so at least the competition remains solid to insure continual drive in innovative and market preferred products from both manufacturers.

Thanks for yet another great photo of the 787 in flight! Still waiting for the front on view of the airplane with the wings sweeping high! By the way, let’s top 2010 with 1,000firm orders for the 787 and orders for more 747-8Is, as well as deliveries of these airplanes to customers!

Pierre Barrera (Everett, Wa):

Randy, thank you for your comments. It is always refreshing to read what you have to say. No matter what, we are always encouraged by your remarks.

P.Sumantri (France):

I am sure the 787-3 conversion to 787-8 had been discussed in depth with the airlines, if it was not done on their request.

Last year (2009) has been tough. This year won't be a walk in the garden either. The economic situation is still unpredictable.

About the 787-3, quite frankly I think a possible mothballing of the 787-3 is a very good news for the 787 program.

Oh my, so you continue to read my blog. I'll try to write better in the future.

Paulo M (Johannesburg, RSA):

For all the gloom of 2009, my opinion is that Boeing did fine. Getting the 787 back on track was the NUMBER ONE priority. And it's looking good. Speaking of which, that is a fine, fine picture flying into the sunset. Very beautiful aircraft, well done.

Can't wait for the most beautiful one though :P

Gordon Werner (Seattle, WA):

Is Boeing still considering the 787-10?

Norman (Long Beach, California, United States):

After a tough year in 2009, I think this year will be better as much of the difficulties with the 787 has been taken care of and the third generation of 747s the 747-8 will make its first flight.

In regards to the 787-3 with no orders now, I think moving back the project until the end of the decade or the cancellation of the (3) model will allow more time and money to speed up and improve the 787-8, 9 and a potential (10) model.

In regards to the 787-10, I think the double stretched 787 should be a viable 777-200ER replacement in seating capacity and range and should be marketed to airlines who have 777-200s and have ordered or are considering ordering the 787 aircraft specifically the 787-9, it can compete with the A350-900 with better weight and efficiency.

Kevin (Los Angeles, CA):

Since there are seasonal variations in any markets-either mid-range or long-haul, ANA's conversion of -3 to other variants will give them more flexibility in terms of aircraft utilization.

As for future variants, there are always more than initially envisioned. Who would have thought in the 60's that there would be a 737-900 or 747-8?

Tom (Germany):

Randy,

"On target" - which one? Ohhh, you are always "On target", sorry!

The latest rere..vissd version? Next version will come when Mr McNerney will present the 787 and 747-xx progresses!

Is the 787 your "kid" hmmmmmmmm - I think you are longing for the 737 composite successor!

Hopefully Boeing must not revise your targets - good luck!

Joshua Lyman (Haverford, Pa.):

About your relationship with ANA, just how do you do it? Boeing management seems to be able to impose anything on ANA's management: a re-order for 787 in May 2009, just a few weeks before the "We will not fly in June 2009" delay; the cancellation of the 787-3 order, which was the launch of the 787 programme... Must be great to have such a customer.

Gabriel (Vancouver, BC, Canada):

Love the picture! I wish there were more high resolution pictures that you've posted up of the 788's inflight pictures! The wing flex is beautiful. I'd love to make them my desktop wallpaper!

Also can't wait for the 748F's first flight! I've made trips down from Vancouver to Everett for both Dreamliner 1 and 2's first flight! Hopefully there won't be any scheduling conflicts for me so that I could come down to see the 748's first flight as well!

Rafael (Santos, São Paulo, Brazil):

Excellent photography! I expect them flying in Brazil!

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