June 2015 Archives

The great divide

A lot of us were surprised when Airbus unveiled its version of the long range market forecast during the Paris Air Show. They typically hold that for later in the year, and what they shared at Le Bourget was clearly lacking in detail.

The one thing that was clear - the great divide between our forecast and Airbus’ when it comes to the very large airplane segment.

Over the next 20 years, Boeing forecasts the need for 540 new airplanes like the 747-8 and the A380. Our new Current Market Outlook reflects a continued shift from very large airplanes to twin-engine airplanes like the 787, 777X and A350.

But Airbus actually raised its very large airplane forecast by almost 50 units from last year, saying it expects a demand for 1,550 of these big airplanes. They make this prediction despite the fact that the A380 hasn’t received a single order all year.

On a side note, we also believe Airbus is forecasting too low on the single-aisle side. Take their forecast of 22,927 airplanes. That equals combined production rates of 95 per month over the next 20 years. Even if the market was split equally between Boeing and Airbus, which is unlikely since there are other single aisle competitors coming into the market, a production rate of about 48 per month wouldn’t match up to the higher production rates they’re talking about.

When Airbus launched the A380 in 2000, it predicted the demand for 1,235 very large passenger airplanes alone through the year 2019. Fast forward to today— and the total number of passenger VLA’s actually ordered is only 371. You do the math.

We use our forecast as a key part of our production rate decisions. This week, we announced that we’re lowering our 747-8 production rate again—this time to 1 airplane per month starting next March. While the very large airplane market continues to be challenging, we’re optimistic this adjustment and some good news on the cargo front will allow us to keep the program healthy.

With four firm 747-8 orders so far this year— and an MOU from Volga-Dnepr for 20 additional 747-8 Freighters — things are looking up.

In our view, the market for big airplanes is small—but viable. However, every trend and signal points to airlines moving toward small and medium widebodies as travelers demand more frequent point to point routes.

Final flight

The very first 787 ever built has taken its final flight. ZA001 landed in Nagoya, Japan at Centrair Airport. The airplane will stay here on permanent display.

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ZA001 lands in Nagoya.

The Nagoya area is home to many 787 suppliers, and we’re proud to donate the airplane to Centrair.

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A water cannon salute at Centrair Airport.

From its first flight to its final flight, ZA001 served us well. Thanks for the memories— and here’s to creating many more.

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Boeing pilots are greeted after ZA001 arrives in Japan.

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That's a wrap

Now that the 2015 Paris Air Show is in the books, I wanted to share some of my takeaways from the week.

First and foremost, I’ll always remember the excitement over the 787-9 flying display.

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The 787-9 in the flying display at the Paris Air Shows. Steve Eastell photos.

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The YouTube video of its rehearsal flight that went viral raised the anticipation at Le Bourget— and the airplane didn’t disappoint. Thanks to Vietnam Airlines for allowing us to showcase just what the 787 can do, while wowing the crowd in the process.

The 777-300ER for China Airlines was also a big hit. We were proud to help unveil the airline’s award-winning interior to the crowds at Le Bourget.

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It was hard to miss the China Airlines 777-300ER on static display. Marian Lockhart photo.

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On board the China Airlines 777-300ER with Jerry Verghese, our director of Brand Management and Advertising.

I also want to thank all of our customers who made announcements over the course of the week. We ended up with orders and commitments for 331 airplanes valued at $50.2 billion at list prices.

Of course, this is just one week out of 52. We still have a lot of things to accomplish the rest of the year. We’re still on track to deliver between 750 and 755 airplanes. That’s not only a Boeing record—it’s an industry record.

The first 737 MAX will roll out of the factory by the end of this year. And the 777X remains on schedule to reach firm configuration this year.

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A view of Le Bourget from the China Airlines 777-300ER. Marian Lockhart photo.

Thanks for following along this week as we say goodbye to Paris.

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Jumbo day at Le Bourget

Day 3 of the Paris Air Show started with some jumbo sized news from Volga-Dnepr. They signed a Memorandum of Understanding for 20 additional 747-8 Freighters. I’ve talked about the cargo market showing continued signs of improvement and this agreement backs that up.

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The 747-8 Freighter is already a key part of Volga-Dnepr’s business.

Our friends at Ethiopian Airlines officially announced their order for six 787-8s. They already have 13 Dreamliners and we’re proud to see them growing their fleet.

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The Ethiopian 787.

The last piece of news today came with our launch of the BBJ MAX 9. The first order is from an undisclosed European customer. This sale marks the fifth BBJ MAX order, counting the four BBJ MAX 8s already on the books.

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The BBJ MAX 9.

I’ll leave you today with some pictures of the great street scenes here in Paris—including some gelato that is well worth standing in line for.

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Day of the MAX

Day 2 of the Paris Air Show turned out to be the Day of the 737 MAX.

We kicked things off in a big way when AerCap announced an order for 100 MAX 8s. This is the first 737 MAX order for AerCap and we welcome them to the family.

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Celebrating with AerCap at Le Bourget. Marian Lockhart photo.

SMBC Aviation Capital was next with an order for 10 MAX 8s. This adds to their 2014 order for 80 MAX 8s.

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The afternoon saw back to back MAX announcements from our customers in China. Ruili Airlines committed to purchase 30 MAXs, followed by Minsheng Financial Leasing signing a Memorandum of Understanding for the purchase of 30 737s, a mix of NGs and MAXs.

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Signing ceremony for Ruili Airlines. Photo by Marian Lockhart.

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Minsheng signed an MOU for a mix of 737s.

We ended the day with Korean Air announcing their intent to purchase 30 737 MAXs and two additional 777-300ERs— along with options for an additional 20 MAXs.

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Korean Air announced an intent to purchase 30 MAXs and two more 777-300ERs. Marian Lockhart photo.

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And while it might be outside the MAX theme of this blog, I want to thank Sriwijaya Air for formally announcing their order for two 737-900ERs. It marks the first all-new airplane purchase for the Indonesian airline and included a letter of intent to exercise options for up to 20 additional 737s.

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Sriwijaya Air signs for 737s. Marian Lockhart photo.

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I’ll leave you with a few more photos from the 787-9 flying display. Enjoy.

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Paris 2015 - Day 1

Day 1 of the 2015 Paris Air Show is in the books, and we stayed pretty busy.

The morning kicked off with Garuda Indonesia announcing its intent to buy 30 787-9s, as well as up to 30 additional 737 MAX 8s. The airline also reconfirmed its intent to purchase 50 737 MAX 8s, originally announced in October 2014.

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Garuda celebrates with us at the Paris Air Show. Marian Lockhart photo.

EVA Airways was up next, announcing its intention to buy five 777 Freighters. EVA currently has more than 35 Boeing airplanes in its fleet, including 20 777-300ERs.

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Joking that he hadn’t ordered enough 777Xs already, Qatar Airways CEO Akbar Al Baker was personally on hand at our chalet to announce his order for 10 777-8Xs and four 777 Freighters. Qatar currently has 50 777-9Xs already on order.

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Qatar Airways joined us for a signing ceremony. Marian Lockhart photo.

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We thank all of our customers for their business—and their confidence in Boeing airplanes.

Our friends from China Airlines are here to show off their newest 777-300ER. The wood grain interiors of the airplane are stunning— and the outside is just as stunning.

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The China Airlines 777-300ER is on static display. Marian Lockhart photo.

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The interior of the China Airlines 777-300ER. Marian Lockhart photo.

The day ended with a capacity crowd gathered on our chalet balcony to watch the 787-9 for Vietnam Airlines take part in the flying display. Much like the rehearsal video that continues to go viral with almost 8 million views, today’s flight wowed the crowds.

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We’ll have more customer announcements tomorrow—so stay tuned. I’ll leave you with some photos of a great restaurant in the Saint Germain des Près neighborhood of Paris, where the bakery across the street brings fresh bread straight to your table almost every 10 minutes. And the beef was even better.

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Good day, sunshine

The arrivals keep coming at Le Bourget in advance of the Paris Air Show. A brand new 777-300ER for China Airlines touched down Saturday morning.

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My colleagues who are already in Paris tell me that brilliant sunshine greeted the airplane.

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This 777-300ER will be on static display at Le Bourget all next week. China Airlines currently operates five newly configured 777-300ERs on routes serving Hong Kong, Bangkok, New York, Los Angeles and San Francisco. The airline is scheduled to receive five more in the next couple of years to support the launch of new European and North American routes.

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Big numbers

Today, I unveiled the new Current Market Outlook—our 20 year forecast of new airplane demand. This year’s forecast is up 3.5 percent over last year, showing that customers will need 38,050 airplanes over the next two decades valued at $5.6 trillion. The Asia market, including China, will continue to lead the way in total airplane deliveries.

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It probably won’t surprise you that the single-aisle market will continue to be the fastest-growing segment, fueled by growth in low-cost carriers and airlines in developing and emerging markets. In fact, about 35 percent of the single-aisle market will go to low-cost carriers.

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On the twin-aisle side, we’re forecasting the need for 8,830 new airplanes, led by small widebody airplanes in the 200- to 300-seat range, such as the 787-8 and 787-9. This year’s forecast also reflects a continued shift in demand from very large airplanes to efficient new twin-engine products such as the 787 and new 777X.

You can download our CMO infographic by clicking here.

After attending my son’s high school graduation on Friday, I’ll be heading over to the Paris Air Show. I’m most excited about seeing the 787-9 in action again during the flying display. This airplane is set for an upcoming delivery to Vietnam Airlines and had an amazing air show rehearsal over in Moses Lake, Wash. The video is below. I’ll have daily updates from Paris—so be sure to check in.

Welding, well done

I’m excited to show off some more progress on our massive 777X Composite Wing Center in Everett. Construction on the first autoclave to support wing production is almost finished.

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An aerial photograph of the autoclave worksite shows the complete autoclave vessel, formerly three separate towers, now welded into one piece.

The first of three autoclaves, measuring 28 feet wide by 120 feet long, is being built at a site adjacent to Paine Field near the Everett factory. The autoclave was initially built vertically in 13 sections, called cans. The cans were then assembled into three towers measuring 40 feet tall.

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Project manager Larry Englund stands at the autoclave construction site in Everett, Wash. Behind him sits one autoclave tower in its original, vertical configuration; the other autoclave tower has already been turned to its side, ready for further welding.

Recently, the towers were turned on their sides and welded together to create the autoclave vessel. Welding is now nearly finished, with testing to follow.

The autoclave vessel is the star of the process, but it can function only with an equally large and impressive support system of electrical, air, vacuum and pressure lines, equipment and tooling.

Later this year, the autoclave will be transported to the Composite Wing Center, a 1.3-million square foot facility that will be roughly the size of 25 football fields.

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A rendering of what the autoclaves will look like inside the 777X Composite Wing Center.

It really is amazing to watch all of the construction progress in Everett. And we can’t wait to start building the 777X.

Countdown to Paris

The Paris Air Show is just around the corner. And today, we unveiled our plans for Le Bourget.

We’re proud to once again be flying a 787-9 at the show. This time, it’s a gorgeous bird for Vietnam Airlines.

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This 787-9 for Vietnam Airlines will take part in the flying display at Paris.

Our pilots have been practicing their routine over in Moses Lake, Wash. You’ll definitely remember this amazing rehearsal for last year’s show at Farnborough that racked up more than 4 million views on YouTube. We’ll be giving you a look at this year’s practice during the week of the show.

Also at Paris, we’ll be displaying a 777-300ER for China Airlines. The airplane will be on static display so that visitors can check out its innovative interior.

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A 777-300ER for China Airlines.

Qatar Airways will also have a 787-8 on static display.

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The Qatar Airways 787-8.

Before I head over to Paris late next week, I’ll be unveiling this year’s Current Market Outlook on June 11. I won’t give anything away except to say that the forecast for new airplane demand isn’t slowing down.

And here’s another thing that isn’t slowing down—our delivery pace. Through the end of May, we’ve delivered 310 airplanes. That’s up from 271 during the same period last year. Congratulations to our entire team for executing on our production rate increases.

The future is here

How’s this for predicting the future? Three years ago, we said that spar load for the first 737 MAX would take place on May 29, 2015. That’s exactly what ended up happening as employees in Renton began assembling airplane number one.

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Employees load the initial parts of the first 737 MAX spars - internal support structures in wings- into automated spar assembly machines.

It’s an important milestone for our employees and our customers as we stay on track to deliver the first MAX in the third quarter of 2017 to launch customer Southwest Airlines. The Renton team also started work on the upper and lower wing panels in the new panel assembly line (PAL) that uses automation to drill holes and install fasteners in the upper and lower wing panels.

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Machine operator Les Nystrom is loading 737 MAX wing skin panels and stringers into the new panel assembly line (PAL).

The unfinished skins, stringers and spars were machined by Boeing Fabrication Skin and Spar in Auburn and Fredrickson, Wash. When finished, the panels and spars will be transformed into completed wings.

Check out this time lapse video that captures the first MAX starting to take shape. (Download takes a couple of minutes).

Past, present and future

Do you ever look at your kids and think—weren’t they babies just yesterday? Today we’re looking at our 777 and thinking, didn’t we just start building these? Incredibly, it’s been 20 years this month since the airplane entered service.

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The first flight of the 777. June 12, 1994.

This program is a great example of how we continually innovate and improve our products. We’re making the airplane even better. Today’s 777 is also built in new ways. We’ve reconfigured our factory to achieve rates the program leaders of 20 years ago probably never dreamed possible. We’re introducing new manufacturing techniques and tools to make the build processes safer for our employees and more efficient with higher quality results.

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First delivery of the 777 to United in 1995. Notice the beautiful fly by of the very first 777.

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First flight of the 777-200ER. October 7, 1996.

But perhaps the best testament to this airplane is what we hear from our customers and their passengers. They truly love it - and we’re honored by their accolades.

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Rollout of the 777-300. September 8,1997.

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The 777-300ER is surrounded by employees at its rollout in November 2002.

The future looks even brighter. We’re making great progress getting ready for the 777X - an airplane that will keep the 777 fresh and new for decades to come. There are visible signs of progress every day in Everett as the new 777X Composite Wing Center is being built.

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The 777-200LR.

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The 777 Freighter lands at at the conclusion of its first flight in July 2008.

I’d like to thank everyone who had a hand in building the 777 from day one- those who have retired, those who have moved on to other programs and those who are still getting the job done every day.

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The new 777X.

I encourage you to check out our special webpage dedicated to the past, present and future of this great airplane.

 

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