Tag Archives: 787

Boeing 787 orders, cancellations, deliveries & backlog through 2017

Quick post with the updated figures and graphic of orders, cancellations, deliveries and backlog of the 787 programme at the end of 2017.

For the fourth consecutive year above 100 787 airplanes have been delivered in 2017, 136 deliveries, the third year in a row with above or 135 deliveries. At that pace, the backlog is being consumed quickly, especially since in the last years the wide-body market has been rather sluggish.

In the last 4 years, 351 orders for 787s were placed, offset by 87 cancellations (about 25%) for a total of 264 net orders, 94 of them in 2017, its best selling year since 2013. Book-to-bill ratio was 0.69 in 2017, less than a desired > 1, but better than in the previous years.

Since 2011, there have been 636 cumulative deliveries, that is 49% of the standing 1,294 net orders. Reversely, there is backlog of 658 aircraft to be delivered, 51% of the orders received so far.

787 orders and cancellations 2017

787 orders, cancellations, deliveries and backlog through 2017.

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Commercial wide-body airplanes’ deliveries per year, 1969-2017

In the last weeks, both Airbus and Boeing have released the figures of aircraft deliveries for the complete 2017. This is just a quick post to update a graphic with the commercial wide-body airplanes’ deliveries per year since 1969 (year of the introduction of the 747) till 2017 (1).

Commercial wide-body airplanes' deliveries per year, 1969-2017

Commercial wide-body airplanes’ deliveries per year, 1969-2017.

Some reflections:

For the first time ever, in 2015 over 400 twin-aisle aircraft were delivered in a year (412), the same feat was achieved in 2016 (402). In 2017 production descended to 394 twin-aisles, still the third best year in wide-body history.

The average number of deliveries for the previous 20-year period (1997-2016) was 239 airplanes per year. Up to now, in the 49 years of twin-aisle market, in only 6 years more than 300 airplanes were delivered in a single year, the six last years, and only in other 9 years more than 200 airplanes had been delivered.

The combined steep production ramp-up during last years has enabled to reach a production rate of more than the double of what was produced in 2010. In particular, the combined compound annual growth rate (CAGR) of the rate of deliveries for the last 10 years has been 7.1%. These rates are above the yearly growth of traffic (measured in RPKs).

With the figures up to the end of 2017, nearly 8,800 wide-body airplanes had been delivered. Thus, by mid-2018, we will certainly reach the 9,000th. However, we won’t know whether the 9,000th twin aisle will be a Boeing or an Airbus.

The share of wide-body deliveries in 2017: 59% Boeing and 41% Airbus.

There were 136 787s delivered in 2017. A remarkable feat: one aircraft short of its 2016 record of 137 deliveries, the largest amount of twin-aisle deliveries of a single model in a single year ever. Only the 787 and the A330 have ever been delivered in excess of 100 aircraft in any given year (4 times for each aircraft).


(1) See here a previous post with the figures up to 2015.

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Boeing 787 orders, cancellations, deliveries & backlog through 2015

Quick post with the updated figures and graphic of orders, cancellations, deliveries and backlog of the 787 programme at the end of 2015.

There were no major operational hick-ups in 2015, but commercially it saw 28 cancellations for 99 gross orders, thus, 71 net orders. This, together with the increased ramp up which enabled 135 deliveries, make that the book to bill of the programme stood at 0.53, far from a desired >1. Therefore, the backlog at year-end continued to decrease down to 779 aircraft (1).

An image is worth a thousands words:

 

787 orders, cancellations, deliveries and backlog through 2015.

787 orders, cancellations, deliveries and backlog through 2015.

(1) That level is lower than 2007 year-end backlog. The highest at previous year-ends was 916 in 2013.

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Twin-aisle aircraft deliveries 20-year forecast (update 2015)

In a previous post I shared a graphic with the “Commercial wide-body airplanes’ deliveries per year, 1969-2015” (see below). I then commented:

“Looking backwards it’s clear that 2015 was a peak in wide-bodies deliveries. Looking forward it may have been a short-term peak, but looking further ahead it is not so clear.”

Commercial wide-body airplanes' deliveries per year, 1969-2015.

Commercial wide-body airplanes’ deliveries per year, 1969-2015.

Last November, I published a post, “Airbus vs. Boeing, comparison of market forecasts (2015)“, with the following table that compares Airbus’ Global Market Forecast and Boeing’s Current Market Outlook:

Comparison of Airbus GMF and Boeing CMO 2015-2034.

Comparison of Airbus GMF and Boeing CMO 2015-2034.

If we focus on the twin-aisle segment, we see that both companies are very closely forecasting between 7,500 and 7,600 passenger aircraft deliveries (with less than 90 aircraft of difference, a 1.2% deviation). The forecast for the freighters is not shown in the table but it is also very similar for the segment, between 718 (Airbus’ view) and 800 (Boeing’s) freighter aircraft. In combination, each company foresees between  8,290 (Boeing view) and 8,297 (Airbus’) airplanes’ deliveries in the segment. Remarkably similar and definitely converged from years ago.

In the very large aircraft segment both forecasts do not converge. But since the figures of deliveries are an order of magnitude lower, I will focus on what they define as “twin-aisle” segment.

Let’s put forward again the question: was 2015 a peak year in terms of twin-aisle deliveries?

Quick math: if we take those ~8,300 aircraft to be delivered in the next 20 years, we arrive at an average of 415 aircraft per year. That figure excludes the very large aircraft. In 2015, there were 367 deliveries of twin-aisles (excluding A380 and 747):

  • A330: 103
  • A350XWB: 14
  • 767: 16
  • 777: 98
  • 787: 135
  • IL-96: 1

Thus, in 2015 we would have been far from the peak. If we simply linearized those 8,300 deliveries from 2015 levels up to 2034, we would get the following profile:

Twin-aisle deliveries historic and 20-year forecast.

Twin-aisle deliveries historic and 20-year forecast.

The reader may correctly think that market forecast figures are not engraved in stone and are rather optimistic. Fair enough.

Both forecast have been rather accurate in the past forecasting traffic growth. Not necessarily in forecasting the number of aircraft in each specific segment. See the post, “Aircraft market forecasts accuracy (update 2014)“,  in which I analyzed Boeing CMO forecast of 1999 with the actual fleet at the end of 2013. See the result below:

Comparison of aircraft fleet at year-end 2013: 1999 forecast vs. actual (sources: Boeing CMO 1999 and 2014).

Comparison of aircraft fleet at year-end 2013: 1999 forecast vs. actual (sources: Boeing CMO 1999 and 2014).

Thus, in 2013 there were 27% less twin-aisle aircraft than what had been predicted in 1999.

If 2015 market forecasts were off the mark in the same proportion (27%), that would mean that instead of 8,300 airplane deliveries in the next 20 years we would see about 6,050… meaning ~300 airplanes per year in the 20-year span.

In that case, we might have seen the peak.

Let’s take a look at current backlogs at the end of 2015:

  • Airbus: 1,112 a/c
    • A330 family: 350 a/c
    • A350: 762 a/c
  • Boeing: 1,383 a/c
    • 767: 80 a/c
    • 777 family: 524 a/c
    • 787: 779 a/c

Thus, at the end of 2015 the combined backlog (firm) stood at ~2,500 airplanes. That is a 30% of the 8,300 forecast, and a 41% of the 6,050 aircraft (i.e. forecast reduced in 27%).

The sceptic reader could still have doubts of the quality of the backlog (i.e., some customers may go through troubled waters and cancel orders).

Last year, I published a post, “Boeing 787 orders, cancellations, deliveries & backlog through 2014“, in which I showed the orders and cancellations of the 787 programme since its launch. See the summary graphic below:

787 orders, cancellations, deliveries and backlog through 2014.

787 orders, cancellations, deliveries and backlog through 2014.

The 787 programme experienced serious delays and industrial issues from 2009 to 2013 in the midst of the worst financial and economic crisis since the Great Depression of the 1930s. Through 2014, the programme had suffered 247 cancellations out of 1,318 gross orders, that is almost 19% of cancellations.

I believe that 19% can be considered an upper ceiling of how much of the current 2015 twin-aisle backlog (~2,500 a/c) could be considered as dubious. Thus, at least about 2,000 firm orders could be seen as rather secured.

Let’s see at the question (was 2015 a peak year?) from a different perspective: in the immediate coming years, what are the announced production rates?

Thus, according to the announced production rates and targets, in 2016 we should see about 380 twin-aisle combined deliveries, higher than the 367 we saw in 2015.

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Commercial wide-body airplanes’ deliveries per year, 1969-2015

The first wide body commercial airplane, the first twin-aisle ever, the Boeing 747 first flew in February 9th 1969 and it was first delivered to a customer (Pan Am) in December 1969. In the following years new wide bodies arrived to the market: the Douglas DC-10 (in 1971), the Lockheed TriStar (1972), the Airbus A300 (1974)…

In the last weeks, both Airbus and Boeing have released the figures of aircraft deliveries for the complete 2015. With them I updated a graphic I had made back in 2013 with the commercial wide-body airplanes’ deliveries per year. Take a look at it.

Commercial wide-body airplanes' deliveries per year, 1969-2015.

Commercial wide-body airplanes’ deliveries per year, 1969-2015.

Some reflections:

For the first time ever, over 400 twin-aisle aircraft were delivered in a year. The feat is remarkable.

The average number of deliveries for the previous 20-year period (1995-2014) was 215 airplanes per year. Up to now, in the previous 46 years of twin-aisle market, in only 3 years more than 300 airplanes were delivered in a single year (the previous 3: 2012, 2013 and 2014) and only 12 times more than 200 airplanes had been delivered (including the previous 3 with more than 300).

The combined steep production ramp-up during last 4 years has enabled to reach a production rate of almost the double of what was produced just 5 years ago. In particular, the combined compound annual growth rate (CAGR) of the rate of deliveries for the last 5 years has been 16.1%, for the last 10 years 10.4%. These rates are the triple and double than the yearly growth of traffic (measured in RPKs).

With the figures up to the end of 2015, almost 8,000 wide-body airplanes had been delivered. Thus, by now, end of January 2016, we have certainly reached the figure (1). We however don’t know whether the 8,000th twin aisle was a Boeing or an Airbus (2).

The share of deliveries in 2015: 65% Boeing and 35% Airbus. Boeing has slightly increased its share of deliveries in the last 4-5 years, in particular with the ramp-up of the 787.

There were 135 787s delivered in 2015. That is another remarkable feat: the largest amount of twin-aisle deliveries of a single model in a single year ever.

Only 6 times ever (combination of model-year) have there been twin-aisle deliveries of over a hundred airplanes: the A330 in the last 4 years (with a peak of 108 airplanes in 2013 -then a record- and 2014) and the 787 the last two years. Only other 10 times there were deliveries of more than 80 airplanes of a single model in a year: the A330 (2010-2011), the 747 in 1970 and the 777 (7 times, including the last 4 years consecutively, out of which the last 3 on the verge of 100 deliveries – 98, 99, 98).

Two days ago Boeing released its 2015 earnings, and with it news of 777 production cut came up. Some time before similar news had come of 747 production rate decrease. With these news, quickly came comments of whether aerospace cycle may have peaked (see here). Looking backwards it’s clear that 2015 was a peak in wide-bodies deliveries. Looking forward it may have been a short-term peak, but looking further ahead it is not so clear. I will leave for another post the outlook of past deliveries mixed with what Airbus and Boeing market forecasts say (GMF and CMO, respectively).

(1) With the sources I used,  at the end of 2015 there were a combined 7,988 wide-bodies delivered. However, I found different figures for the deliveries of the Ilyushin IL-86 (between 95 and 106). In any case, both figures would leave the total tally below 8,000 (making 2016 “the year of the 8,000th delivery”); I took for the analysis most conservative figure.

(2) Working at the moment for the Airbus A330neo programme, I will assume the 8,000th delivery was an A330, rather than a Boeing.

(3) I have indicated in the post that we have just passed the mark of 8,000 wide-bodies delivered since 1969, and, on the other hand, the different studies state that there are about 4,900 twin-aisle in operation. The gap of ~3,100 airplanes corresponds to those retired, parked, scrapped, crashed, displayed in museums…

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Wide-body mix in 17 years of Boeing CMOs

Two years ago, I wrote a post showing the puzzling change in Boeing’s predicted mix of twin-aisle sales, between small and medium wide-bodies (“Wide-body mix in 15 years of Boeing CMOs”) (1). A few days ago I wrote a post about the publishing by Boeing of its Current Market Outlook for 2015-2034.  As I noted in that post, this year’s CMO is consistent with last year’s figures, i.e., the larger share of the forecasted market corresponds to small wide-bodies (787s from Boeing’s perspective). Recall the numbers:

  • small wide-bodies: 4,500 a/c in CMO2015 (passenger aircraft only),
  • medium wide-bodies: 2,990 a/c in CMO2015 (same figure as in CMO2014).

In the sub-segment of the medium wide-bodies passenger aircraft figures for  have remained constant and there is a slight increase in freighters (60 a/c); whereas for small wide-bodies the main increase is seen in the passenger aircraft (+230 a/c).

Since I keep a collection of CMOs from many years, I will include again a comparison going 17 years back…

Twin-aisle mix distribution (Boeing CMO 1998-2015, includes both passenger and freighter aircraft).

Twin-aisle mix distribution (Boeing CMO 1998-2015, includes both passenger and freighter aircraft).

Seeing at the graphic, made using Boeing’s forecasts’ figures:

  • During the first 5 years (1998-2003) the trends are quite constant, seeing medium wide-bodies a slightly higher demand.
  • From 2003 to 2007, the mix is reverted, possibly to favour the launch of the 787.
  • In 2008 the CMO did not provide the split.
  • From 2009 to 2013, you can see that both trends in the forecasts are erratic… why? Only Boeing knows. (2)
  • From 2013 to 2015, it seems that the trends are stabilized again in a higher demand for 787-size aircraft.

(1) Last year, I made an update of that post with the consolidated view of the last 16 years, find it here.

(2) A speculation: a Boeing-internal need to sell the concept of the 777X?

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Boeing 787 recurring costs vs. recurring income

Few days ago I was discussing with some commenters on the blog of aviation analyst Scott Hamilton (Leeham News and Comment) about the recurring costs Boeing may be experiencing in the 787 program at the moment.

I used in the discussion the analysis I had made of the learning curve Boeing has experienced in the last 2 years according to cost reductions reported by its CFO, Greg Smith. See a post I wrote about it here. The result I reached is that lately they achieved a 87%. With information disclosed last year, the figure I arrived for 2013 was ~84%, see the post here. However, in the calculation to obtain the learning curve experience the actual costs are not needed, it is sufficient to know cost reductions achieved (reported) between given units.

However, when in 2011 I wrote a series of posts (1) about Boeing 787 break even, I did try to estimate what the cost of the first production units were using published information at the time. At that time it was disclosed that Boeing had about 18bn$ of work in process (WIP) and a number of aircraft in different stages of production. Reported average costs ranged from 250m$ to 400m$. I made some simple assumptions and arrived at an average cost of 310m$ for the first ~60 units.

The next step is to accommodate those average costs into a learning curve profile. The steeper the curve (75%) the more expensive the first unit would have been. Since in 2013 the calculated curve was a 84%, I obtain that the first must have been around 650m$ (2). From then on, I apply the mentioned 84% through end 2013. Then I switch to a 87% curve (slower learning) following the reported figures from Greg Smith.

This discussion so far gives an idea of how to estimate the recurring costs. At the end of 2014 this figure is estimated around 180m$.

In order to know by when Boeing will turn the production of 787s into something profitable, we first need to know by when the recurring costs will be lower than the recurring income. The latter is estimated from the information about prices (published by Boeing here) and discounts applied (estimated in other blog posts, see the last update for 2014).

Boeing list price for the 787-8 in 2014 was 218.3M$.

These list prices are, however, increased almost on a yearly basis by Boeing. Sometimes very steeply (+11.4% in 2010, from 2008) and other times more moderately (+2.4% in 2013 vs. 2012). Going into the future I assumed this increase to be constant and about equal to 2014′ increase, 3%.

On the other hand, Boeing applies some discounts to its customers. These are never disclosed. Some are reported by some sources. What I do is to try to estimate an average discount from reported information. See a detailed calculation here. The latest figure that I arrived at was about 47%. Going into the future I assumed this discount to remain constant. You can see here the recent evolution of discounted 787-8 prices.

With all these ingredients, the only thing left is to plot together the recurring costs and recurring income:

787 recurring cost vs. recurring income evolution.

787 recurring cost vs. recurring income evolution.

As you can see recurring costs may be lower than recurring income at the end of 2019.

This will truly depend on the learning curve achieved, the number of units produced (3) and the pricing power Boeing manages to have. If the learning is steeper, the date will be sooner. If the ramp up is higher, the date will be sooner. If the discounts are lower or the list prices increased more, the date will be sooner. In any other case, either 2019 or beyond.

(1) See the complete series here: “Will Boeing 787 ever break-even?“, “More on Boeing 787 break even” and “787 Break Even for Dummies“.

(2) We will never know that figure. I wonder whether this is even known or registered (if not deleted and forgotten) within Boeing.

(3) For the numbers of units built I based the model in reported information that the ramp up to 12 aircraft per month is expected for 2016. I assumed that in 2015 they are at somewhere between 10 and 12 aircraft per month.

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