The Third Quarter

It’s very fitting that the day Boeing got great financial news on third-quarter earnings, the very first revenue flight of ANA’s 787 Dreamliner landed in Hong Kong. I wish I could have been on the flight myself, but as 787 Vice President and General Manager Scott Fancher said— thousands of Boeing employees were with ANA in spirit as they took to the air. ANA stood by us and we couldn’t be more thrilled to see them fly first. Congratulations to them on this exciting day.

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The first Dreamliner revenue flight, ANA Flight 7871, takes off from Tokyo on its way to Hong Kong.

The good news kept coming today as we announced third-quarter net income of $1.1 billion ($1.46 per share) on revenue of $17.7 billion. In fact, things are so positive that the company increased its 2011 earnings per share guidance to between $4.30 and $4.40. I’d like to share some of the stories that really played a role in our success.

737

The launch of the 737 MAX grabbed all the headlines—and for good reason. This airplane will continue to build on our advantage in the single-aisle market and offer incredible economics and performance for our customers. But I don’t want anyone to forget the great success of our Next-Generation 737. We continue to make improvements including the delivery of the first airplanes with certified performance improvement engines, part of a broader performance package that will improve fuel efficiency by about 7 percent compared with the first Next-Generation 737s delivered in 1998. To keep up with the worldwide demand for this airplane, we just started building the first 737 at the rate of 35 a month.

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Posing with the 737 MAX during its debut.

747-8

The 747-8 Freighter completed flight testing and was certified for entry into service in the third quarter. While the first delivery to Cargolux happened a little later than planned, it didn’t take away from the achievements made by everyone on the 747 program. The 747-8 Intercontinental also continued progress toward certification in the third quarter. As of last week, it had completed 98 percent of its certification flights and has begun function and reliability testing, keeping it on track for certification this year.

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The 747-8 Freighter leaves on its delivery flight.

767

The 767 program ramped up production to a rate of two airplanes per month in July for the first time in eight years and delivered one freighter and four passenger airplanes during the third quarter. The program continued to prepare the factory to build the first 767-2C airplane, which is the platform for the U.S. Air Force KC-46 Tanker.

777

I’ve been keeping you posted on our bid to make this the best selling 777 year in Boeing’s history. The 777 posted 55 net orders during the third quarter, making 2011 the third-best order year so far, with three months to go to reach the record of 154 net orders set in 2005. This best in class airplane is so wildly popular with our customers and the flying public, it’s being flown on average more than 12 hours a day - a 9 percent gain over last year and the highest average operating time since the 777 entered service in 1995.

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The 777 is on track for a record year.

787

As I mentioned earlier, the first revenue flight of our 787 landed today in Hong Kong after making the trip from Tokyo. That moment couldn’t have been possible without perhaps the most exciting news from our third quarter—the first delivery of the Dreamliner to our great partners at ANA. Standing in the rain in Everett on that September day is something I’ll never forget as Boeing employees paid tribute to ANA.

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First delivery of the 787 Dreamliner to ANA.

Commercial Aviation Services

Looking at some of the many accomplishments by CAS, Fleet Services delivered a 747-400 Boeing Converted Freighter to Singapore Airlines Cargo and received a perfect customer satisfaction score. KLM signed on as a launch customer for Wind Updates, a Flight Services offering that saves fuel by providing real-time wind information to pilots. And United Airlines renewed and expanded its use of Airplane Health Management - a software system that gives airlines real-time maintenance information — to include the Continental fleet.

The news couldn’t be better for Boeing employees and our shareholders. It should be an exciting end to 2011—so stay tuned! In the meantime, check out our third-quarter highlights video that showcases all of our accomplishments.

Comments (7)

Varun G (Chicago Illinois):

This is it. After years and years of development and research this is the day everybody has been looking forward to. To see the 787 do what it was meant to do. Connect passengers to the flying experience, and today Boeing and ANA have done that. Along with all of the other programs at Boeing moving forward, Boeing has done great, and has reinforced that Boeing is the best aircraft manufacturer in the world. Also, Randy, why did ANA decide not to fly their 787 till today? Anyway, I would like to congratulate Boeing on their amazing success, and to keep those 787's coming. Last question Randy, what is the current production rate for the 787?

Randy Tinseth:

Varun,

Thanks for the comments. ANA was putting the plane through its paces at airports around Japan leading up to the inaugural flight. It was a great coincidence that it took place on the same day as our earnings report. As for 787 production rate, this week we're going up to 2.5 airplanes per month.

Therry (Jakarta, Indonesia):

787 is the most beautiful airplane i've ever seen. big congratulation on the 1st delivery and revenue flight. really looking forward to fly on it.
i'd like to ask one question, how many type of 787 is now being manufactured by Boeing? what is the difference between each of it?

Cameron Tu (Murrieta, CA):

Congratulations on the first commercial 787 flight, Randy!

I know that the 787 first flew nearly two years ago. But.. I can only imagine the sigh of relief you felt when the first revenue-generating 787 flight touched down, to let hundreds of pleased passengers and crew depart the aircraft.

Now the Dreamliner really is a reality.

Paulo M (Johannesburg, RSA):

Congratulations for the 787 EIS with All Nippon. Obviously, it hasn't been the easiest achievement.. Wishing Boeing and its partners the best with production ramp up - not just for this jet, but also the many new Boeing jets coming online shortly. Many will be in competition for resources with other new jet programmes around the world.

tom (Germany):

Randy,

congratulation on the first commercial 787 flight...hmm.. a little bit ambivalent!
Cargolux... just a jump to the next airport and EIS was on the day (or the next day) of the first delivery!

The charter flights to Hong Kong, the intra Japan flights are interesting: The 787-8 is competing with the 737-8/9 - but there was a 787-3!

Thus the real EIS will be in the first quarter of 2012 when s/ns... fly from Tokio to Frankfurt (with pack. b RRs?)!


Norman (Long Beach, CA):

With the 787 now in operating passenger service, the common flyer can experience flying in the most innovative airliner since the 707, 747 and the Concorde and has the most innovative cabin since the 307 and DC-4E. The 787 is the first all new airliner in the 21st century. Congratulations to Boeing, ANA and all involved. As Captain Picard said "Welcome to the 24th century", Boeing and ANA in real life and with confidence can say "Welcome to the 21st century". The future is here.

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