Boeing 787 Program Update

October 24 saw Boeing release its third quarter results.

The summary points of the news is outlined below and a full report can be found by clicking here.

• Third-quarter revenues rose 12 percent to $16.5 billion on higher commercial airplane deliveries and defense business growth

• Net income grew 61 percent to $1.1 billion and EPS increased to $1.44 per share

• Operating cash flow increased to $3.3 billion

• Backlog expanded to a record level of $295 billion

• Guidance increased for 2007 revenue, EPS and cash flow; 2008 guidance adjusted to reflect revised 787 delivery schedule

Since the October 10 news of the 787 being rescheduled, there was always likely to be a heavy focus on what information emerged, one day before the first flight of the Airbus A380-800.

The Wall Street Journal also covers the story here.

Image courtesy of prestwest

The points below were kindly compiled by NYC777 & Alnis over at FleetBuzz.com.

• Strengthen program management by bringing in Pat Shanahan - recognized that they needed different strengths at this point in the program.

• Finalizing the master schedule for first flight, first delivery & production increase with suppliers

• No ETOPS flights required allowing flight test program to be leaned out

• Additional Boeing employees throughout the supply chain to help catch up on work - includes Tier 1 & Sub-Tier suppliers

• Adding financial resources to meet the new schedule

• Interest in the 787 continues to be very strong

• Despite increased R&D spending the business case continues to be very strong

• Revenue impact in 2008 of about $4bn due to rescheduling of 787 deliveries from 2008 to 2009

• Operating cashflows will be reduced due to rescheduling of deliveries to 2009 and increased 787 inventory costs in 2008

• Expecting to deliver about 3-4 787 in 2008 and about 105-106 deliveries in 2009

• Expect 55-65 aircraft built by time of EIS as construction schedule not changed, even though first flight was delayed

• Time built into new schedule for changes that may be needed because of flight testing

• 10 or more barrels now at Spirit - build rate about same, only deliveries pushed out

• 777-200F flight testing will get underway in 2008 - should not interfere with 787 program

• 747-8 testing and development programs will not be affected either

• Rescheduling will allow newest flight control software to be installed

• There was a difference between engineering plans and physical reality of parts being delivered - manufacturing engineers sent to suppliers and now seem to have this problem in hand but they are continuing close co-operation with suppliers.

Claims of delays to the 777-200F and 747-8 programs have also recently surfaced from the usual critics.

Given the conference call and points noted above, until such time Boeing publically discloses any program target amendments to either of the aforementioned airplanes, their plans remains unchanged.

Like the 787 rescheduling, better to hear it direct from Boeing than rely on hearsay and pretend it’s sacrosanct.

The 747-8F is on course to enter service in late 2009. The 777-200F is still scheduled to enter service during the fourth quarter of 2008.

Flight testing for the 777-200F is on track for 2008 as at the time of writing.

Where the 787 is an all-new airplane going through teething troubles, the 777 and 747 are the more mature products in the BCA portfolio with an already well-established logistics and engineering network in place to support these growth models with minimal disruption.

First flight is still scheduled to take place before the end of the first quarter 2008. The schedule for fabrication of the 787-9 and 787-3 remain on track and unchanged.

The next program update is due December 2007.

6 comments October 25th, 2007