Boeing: The good, the bad and the ugly

By Tim Raetzloff | Mar 21, 2012

The Good

On March 1, Boeing completed the 1,000th Everett-built 777. The 777 took the shortest amount of time to get to 1,000 deliveries of any wide–body jet liner ever produced, about 17 years, compared to well over 20 for the Boeing 747 and 767.

The 777 also looks like it will ultimately become the best-selling wide-body jet liner of all time.

Boeing has a backlog of several hundred of the 777, is producing them at a rate of seven a month, and intends to increase the production rate to 8.3 a month. The 777 is also, statistically, the safest commercial airliner of all time and no other plane is even very close.

On March 6, the fuselages of the 4,000th and 4,001st 737NGs passed through Edmonds on a BNSF freight train. Boeing has built nearly 4,000 of the 737 NGs in less than 15 years. Boeing is currently producing the 737 at a rate of 35 a month.

The Bad

Boeing produces the 787-8 with a choice of two engines, Rolls Royce and GE. The Rolls Royce engine was certified by the FAA in August 2011 after a test program that ran 20 months. Boeing expected the test program to complete in nine months.

The GE test program is now apparently complete after 21 months, and FAA certification is expected soon. The GE test program was much longer than Boeing anticipated, and the entire test program ran 27 months, more than a year longer than Boeing predicted as recently as July 2010.

Many of the unfinished 787s at Paine Field will use the GE engine, but there is no point in putting expensive engines on planes that can’t be delivered.

Air India has been waiting for years for its GE-engined 787-8s. Air India now expects compensation of $500 million to $1 billion for the delays.

The Ugly

Boeing received FAA approval to deliver the Rolls Royce-engined 787s in August 2011. The first delivery was made to All Nippon Airways in September. Another was delivered in October. One more was delivered in December, and 2 in January.

Since mid-January there have been no 787 deliveries. There are now about 50 unfinished 787s at Paine Field and the number continues to grow. The 787 production line, if it can be called that, is just ugly.

When a 747, 767, or 777 rolls out of the production line you may expect it to be delivered in a month or so. When a 787 rolls out of the production line you may expect it to sit there for six months or a year while things that weren’t done correctly are identified and fixed.

One production 787, LN7, has sat there for almost three years, and several are at two years of post-production work. It won’t be a production line until a plane rolls out finished.

Boeing says that will happen this year. Boeing said it would happen last year, and the year before. One of these years it may be true.

The 787-8 program is now more than 3.5 years behind schedule.

Air New Zealand, the launch customer for the 787-9 model, says that they expect entry into service to be delayed past mid-2014. If Air New Zealand is correct, the 787-9 will enter service more than five years late, if it can avoid the test delays and production delays that have plagued the 787-8.

That prospect diminished this week when Boeing announced that Alenia, which caused serious problems with the 787-8 tail section, would be a supplier of tail sections for the 787-9. The other supplier for tail sections for the 787-9 will be a new facility in Utah that has never built aircraft parts before.

That sounds a lot like South Carolina to me.

My position in Boeing is again short.

Tim Raetzloff, who operates Abarim Business Computers at Five Corners in Edmonds, evaluates Puget Sound business activity in his regular column in the Beacon. In the interests of full disclosure he says, “Neither I nor Abarim have any interest in or conflict with any company mentioned in this column.”

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