Feelin' stronger every day

Hello again from Dublin. As I mentioned in my last post, I’m currently attending the European Airfinance Conference where I have had the chance to hear what’s in store for the year ahead. As I’m listening, I can’t help but be amazed by just how far we’ve come in just a few short years. Undoubtedly, some carriers are still recovering from the economic crisis (especially some of those here in Europe) even while many others are thriving in the current environment. In total, last year was a record year in terms of profitability. And, a better year for our customers has meant a better year for us at Boeing Commercial Airplanes.

As the global economy continued to recover and air traffic rebounded, the demand for new airplanes increased faster than expected. That’s reflected in 530 net orders last year and the delivery of 462 airplanes as reported in our fourth-quarter 2010 results today. Here’s a glance at how our programs faired:

737 Program
With 376 deliveries in 2010, the Next-Generation 737 set a company delivery record for the second consecutive year, delivering an average of more than seven 737s per week. Demand for Next-Generation 737s remained strong. In October, the FAA granted an airworthiness certificate to the first Next-Generation 737 with the innovative new Boeing Sky Interior. Five customers received their new interiors in four regions of the world: flydubai, Malaysia Airlines, Norwegian Air Shuttle, Continental and two of TUI’s airlines — Jetairfly and TUIfly.

777 Program
The 777 team delivered its 900th airplane in November — a 777-200LR (longer range) to Ethiopian Airlines — reaching this delivery milestone faster than any other twin-aisle airplane in history. In December, Air New Zealand welcomed the airline’s first Boeing 777-300ER (extended range).

767 Program
The 1,000th 767 neared completion in the fourth quarter and is scheduled for delivery to ANA next month. Building 40-32 and the relocation of the 767 program reached 65 percent completion in the fourth quarter. The grand opening of the new building is planned for early next month.

787 Program
In the fourth quarter - one year after the 787 began its flight test program - the sixth and last flight-test airplane made its first flight. We’ve made substantial progress within the production system and further improvements in the quality of shipments to final assembly from our supply base.

An in-flight electrical incident in the fourth quarter resulted in first delivery moving to the third quarter of 2011. Improvements in software and a few minor hardware changes are being incorporated, and the airplanes have returned to flight status. Demand for the 787 remains strong, with 847 firm orders at the end of fourth quarter from 57 customers around the world.

747-8 Program
During the fourth quarter, electrical power was successfully turned on for the first two 747-8 Intercontinental passenger airplanes. Flight testing is two-thirds complete with more than 656 flights for more than 1,747 hours. We expect to deliver the 747-8 Freighter to Cargolux in mid-2011. The 747-8 Intercontinental will have its premiere Feb. 13, with delivery of the first airplane scheduled for late 2011.

Commercial Aviation Services
CAS captured its first GoldCare contract this year, and the team also led the industry in airplane on ground mission dispatch rates. In the fourth quarter, it announced a strategic alliance with Fujitsu to develop a service for greater operational efficiencies in information and maintenance operations. The seventh and final 767-300 Boeing Converted Freighter was delivered to ANA in Singapore and Malaysia Airlines signed a 10-year agreement for the 737NG Component Services Program for four airplanes, growing to 35 by 2015.

In summary, by almost any measure 2010 was an outstanding year - and a reflection of the amazing job the world carriers have done managing through difficulties and emerging strong. And, the good news is that we expect the market to continue on a steady trend upward. And though there are still economic challenges to be dealt with, many are Feelin’ Stronger Every Day.

Comments (9)

Carl Luther:

Curious about the 737 production rate citation - was this rate the maximum throughput for a single week? The math just doesn't compute - 376 completions divided by 50 weeks (allowing for holidays...) equals something in the order of 7.5 aircraft per week. Inquiring minds want to know...

RC20 (Anchorage AK):

I noted that the CEO said that they would keep the core engineer talent in any down turn and fight not to cut too deep.

With the incredibly huge mess from the 787 program and the serious mess on the 747, has it occurred to the powers that be that they should not cut ANY?

So much for lessons learned.

Skyler Kelm (Everett, WA):

You need to check your math on the 737 numbers.
13 737s per week would have given us 676 737s for the year, not 376.

Paulo M (Johannesburg, RSA):

Things got done. The 747-8F & 787 flight test programmes have really gone through the required respective certification hours, with all the snags that come up. The 777 is just over a year away from eclisping the 1,000 magic mark - and the 767 at current rates. Looks good.

You're reporting from capital a euro country that experienced great financial pain recently. Europe seems to be pulling together, although much remains to be done. S&P downgraded Japan today. The US needs to commit itself to a more sustainable path - on a range of issues.

Still lot's that could impact the airlines. Also, looks like the world - at least the developing world - is about to get onto an epic high-speed rail building frenzy. May or may not be a stretch. Certainly more vibrant competition in some areas - or indeed, complimentary service.

Should be an interesting year, best of luck, planning & execution.

Randy Tinseth:

Hi Carl,
Thank you for your note and great catch. And, my humble apologies to all my readers for my mistake. Market demand has indeed returned, but that weekly rate would be simply astounding...and exhausting.
I have corrected the blog to reflect the correct numbers. Thanks again for reading and taking the time to drop me a line.

Tom (Germany):

Hi Randy,

"Improvements in software and a few minor hardware changes are being incorporated, and the airplanes have returned to flight status."
Yes, that's right (I believe at least) - but it is also wrong (I believe at least because big Boss said
it is a temporary fix - not good for ETOPS).
You know, BCA is looking for a full ETOPS cert. from the very beginning of EIS.
Is this problem similar to that you had with the breaks (insufficient redundancy)?

The 747-8I is grandfathered - is there a need for an evacuation test because of increased pax-load?

Thanks for your answers!

Jon (Colorado Springs, CO):

Hi Randy,
Has the 747-8f finished Nautical Air Mile Testing yet? And if so, what are the results looking like -especially given the revised control laws? As for 748i orders, I remain convinced that until range figures are known, customers will wait. I think that given the success of the recent 10,010,000lb 748f takeoff, Boeing should go all out and offer the 748i with, say, a 1,000,000lb max t.o. weight (also, perhaps, with the higher thrust GEnx-2b69). That would add a useful 25,000 lb of payload for the current 8000/8100 nmi range, or conversely, ~8500 nmi range at the current payload level. A mix could work too: (with upper deck galley stowage option) 479 passengers at 8300 nmi range could be possible. That would go a long way to ensuring the 748i's competitiveness through this decade.

TC (Mt. Vernon, WA):

For the 787, how about another classic by the band Chicago. Recorded with backup vocals by some of the Beach Boys, Wishing you were here.

Norman (Long Beach, California, United States):

With the deliveries of the 747-8 freighter, the Intercontinental and the 787, 2011 will be a milestone year for Boeing. Things are looking up to nothing short of a great year.

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