The Boeing Company

[Pieter C. 5]

Boeing says 747-8F year-end service entry is at risk

 

Boeing is warning that further delays could occur in its 747-8F certification campaign as it adds a fourth aircraft to flight testing.

 

Jim Albaugh, president and CEO of Boeing Commercial Airplanes, maintains that first delivery to Cargolux will take place by year-end, but quickly adds: "There's risk to that."

 

"Every day we're trying to build contingency, every day we're trying to make sure that we have this airplane in a position where we can deliver it at the end of the year," he explains.

 

Albaugh says that the 747-8F is at a greater risk of missing its delivery target than the 787. To reduce this risk, Boeing will add a fourth flight test aircraft, likely the second production aircraft (RC503), for use in engineering flight tests.

 

Three 747-8F test aircraft are flying today, and have accumulated around 300h over 140 flights, says Albaugh. The first test aircraft, RC501, is based in Moses Lake, Washington for flutter testing, another two, RC521 and RC522, are based in Palmdale, California, and transitioned from Washington State on 9 May and 19 April, respectively.

 

Boeing's 747-8F flight test programme requires 1,600 flight hours and 2,100 ground hours.

 

Additionally, the company expects the US FAA to grant Type Inspection Authorisation in "the next few days", says Albaugh, kicking off certification operations.

 

The 747-8F has absorbed a year's worth of delays following extensive design changes and resource starvation that stifled its supply chain. Those delays pushed the 747-8F's entry into service from the fourth quarter 2009 to late 2010.

[Pieter C. 5]

Boeing Gets Large Plane Order From Russia

 

June 1, 2010

 

Boeing has won an order from a Russian state company for up to 65 planes, nearly half its net order for 2009, beating European rival Airbus and a Russian manufacturer.

 

Buyer Russian Technologies, which operates carrier Rosavia and has a deal with Aeroflot to buy aircraft on behalf of the flag carrier and lease them.

 

"In the near future, Russian Technologies in cooperation with Aeroflot will issue specific orders for specific models," Russian Technologies said.

 

Earlier, Russian Technologies said the tender, contested by Boeing, Russia's United Aircraft Corporation (OAK) and Airbus, was for 50 midrange narrow-body planes with an option for 15 more.

 

However, Aeroflot said it would continue buying from Airbus. It has chosen Airbus planes over Boeing in recent years, and analysts have said the carrier would have to make significant investment to accommodate new Boeing aircraft.

 

A spokesman for Aeroflot said it was looking at leasing another 15 Airbus A320s in addition to the three due for delivery this year and 13 between 2011 and 2013.

 

By the end of the year Aeroflot expects to operate 67 Airbus airliners.

 

Aeroflot said it could, however, consider the commercial merits of a Boeing deal.

 

"If Russian Technologies' offer (of Boeing aircraft) is in line with the market or below, we will consider it," the Aeroflot spokesman said.

 

The two carriers were slated to merge their fleets, creating a single national airline. Aeroflot is effectively managing some of Rosavia's holdings while they are prepared for formal takeover by Aeroflot.

 

Rosavia was created when Russian Technologies swept up the debris after the mass failure of a few remaining regional carriers, once known as "babyflots", which were created when the Soviet-era Aeroflot's monopoly was ended in the 1990s.

 

The head of Russian Technologies, Sergei Chemezov, has promised further orders to the United Aircraft Corporation.

 

The companies are under political pressure to buy new aircraft from the domestic industry, which is struggling to make good on a revival plan after a decade and a half of decay.

 

A new Russian model designed to spearhead that effort, the Superjet, has been repeatedly delayed.

 

"In addition, Russian Technologies will purchase domestically produced planes including the MS-21, AN-148 and Sukhoi Superjet from the United Aircraft Corporation," it said.

 

(Reuters)

[Pieter C. 5]

Boeing Not Aiming To Underbid EADS On Tanker

 

June 3, 2010

 

Boeing is likely to bid in the US Air Force aerial tanker competition, but its goal is not simply to underbid rival EADS, which could have an advantage because it receives government subsidies, Boeing's chief executive said on Thursday.

 

"This can be a dangerous situation for Boeing. We have to bid responsibly," James McNerney said on a webcast of an analyst conference. "Airbus could win this thing on price," he said.

 

At stake is a US Air Force contract worth up to USD$50 billion to build 179 new aerial refuelling planes. Boeing has said it intends to bid despite concerns that EADS could have a price advantage.

 

The two companies must submit bids by July 9 to replace the Air Force's ageing fleet of KC-135 tankers.

 

Last month, the US House of Representatives approved a Boeing-backed bill that would force consideration of illegal subsidies in the race to sell refuelling aircraft to the US Air Force.

 

Also McNerney said the company still is considering whether to replace its hot-selling 737 model with a new plane or outfit its existing 737 with a new engine.

 

McNerney said that if Boeing could design a plane by 2020, it may replace the old model. If it takes until 2025 to produce a new plane, then the case builds for designing a new engine, he said.

 

"I'd rather not put the backlog at risk twice unless we have to," McNerney said.

 

(Reuters)

[Pieter C. 5]

Boeing Working On 777, 787 Deals

 

June 7, 2010

 

Boeing is working on deals to sell 777 and 787 long-haul aircraft to a number of airlines but does not see a decisive rebound in wide-body demand until 2012, the head of its passenger jet business said on Monday.

 

The comments come amid industry talk of a resurgence in demand from Gulf-based carriers and a sudden increase in optimism from airlines industry group IATA, which now sees airlines bouncing back to an overall profit in 2010.

 

"I hope IATA is right but I am not quite as optimistic," Jim Albaugh, chief executive of Boeing Commercial Airplanes said.

 

"I continue to see airlines returning to profitability in 2011, and 2012 will be the year we see them really stepping up to wide-body orders," Albaugh said on the sidelines of the airline lobbying group's annual meeting.

 

Boeing's European rival Airbus said on Sunday it would announce orders at the Berlin air show, which runs back to back with the IATA event in the German capital.

 

Industry executives say there is mounting speculation that Gulf-based heavyweights such as Emirates could announce orders for Airbus and Boeing planes soon.

 

"We don't get into details on specific campaigns but we are in discussions with a number of airlines on 777 and 787," Albaugh said.

 

Boeing, which recently said it would boost production of its popular 737 narrow-body aircraft to 34 a month, is thinking about whether to raise production further, Albaugh said.

 

Boeing has also announced increases on the 777 and expects to take decisions on whether to modify that plane or add a larger variant to the 787 Dreamliner late this year or in early 2011, he said.

 

Albaugh said testing on the 787, a carbon-composite plane which Boeing aims to deliver by the end of the year after a two-year delay, was going "very, very well".

 

Boeing has not decided whether to upgrade the best-selling 737 family with new engines and a decision is several months away, he said. Airbus is thinking of putting new fuel-saving engines on its A320 narrow-body aircraft.

 

"It is a very complex algorithm with all kinds of factors. I am agnostic on which is the right decision," Albaugh said.

 

But he vowed to defend the company's position in the roughly 150-seat market.

 

"We are not going to abandon the small plane market," Albaugh said.

 

Airbus and Boeing are both trying to outwit each other while fending off a challenge from Bombardier's 100-145-seat CSeries family and the longer-term prospect of competition from China.

 

(Reuters)

[Pieter C. 5]

Boeing To Boost 737 Production Rate

 

June 15, 2010

 

Boeing said on Tuesday it would increase the production rate on its narrow-body 737 model to 35 planes per month in early 2012.

 

The production rate increase is the second announced for the strong-selling, single-aisle plane this year. Boeing said in May that it would boost production to 34 per month from 31.5 per month, citing strong demand.

 

Boeing said the second production rate increase "acknowledges the anticipated long-term growth in this market segment."

 

"We've managed our current backlog efficiently, and increasing rate is the product of our comprehensive planning and preparation," said Jim Albaugh, chief executive of Boeing Commercial Airplanes. "We will continue to monitor demand as we go forward."

 

Boeing and rival Airbus suffered a slump in orders in 2008 and 2009 amid an economic recession. Demand has improved as the economy recovers.

 

In March, Boeing said it would speed up planned output rates for two of its popular wide-body aircraft as demand resumed among airline customers.

 

Orders for Boeing's commercial aircraft output fell 61 percent to 263 in 2009, as air travel and freight transport slumped.

 

(Reuters)

[Pieter C. 5]

Boeing To Sell 50 737s To Russia

 

June 25, 2010

 

A Russian state holding company plans to buy 50 Boeing 737s in a deal worth up to USD$4 billion, President Barack Obama said on Thursday.

 

State-owned Rostechnologii and Boeing signed a "proposal acceptance" with an option for the sale of 15 additional planes to the Russian national airline Aeroflot, the White House said.

 

Obama announced what amounted to the agreement in principle at a joint news conference with Russian President Dmitry Medvedev. He hailed it as an example of expanding bilateral trade and commerce 20 years after the end of the Cold War.

 

The sale of 50 Boeing single-aisle aircraft worth USD$4 billion "could add up to 44,000 new jobs in the American aerospace industry," Obama said. The deal was one of several signed at a US-Russia business summit coinciding with Medvedev's visit to the United States.

 

Boeing looks forward to finalising an agreement, said Jim Proulx, a spokesman for Boeing's commercial aircraft arm in Seattle.

 

Rostechnologii plans to provide Russian airlines with planes that will help them grow their domestic and international operations alongside flag-carrier Aeroflot.

 

(Reuters)

[Pieter C. 5]

Air China To Buy 20 737s For USD$1.4 Bln

 

June 28, 2010

 

Air China announced that it would buy 20 Boeing 737-800s for USD$1.4 billion.

 

The planes, which will be delivered between 2013 and 2015, will boost Air China's fleet capacity by about 5 percent from December 2009, based on available tonne kilometres, allowing it to increase the frequency of flights, the carrier said in a statement to the Hong Kong stock exchange.

 

The airline said it would pay for the planes with cash, bank loans and other financing tools.

 

Chinese airlines are benefiting from solid air traffic growth in China, which may overtake Japan as the world's second-largest economy this year, industry analysts said.

 

(Reuters)

[Pieter C. 5]

July 9, 2010

 

Boeing delivers 114 aircraft in second quarter, down 8.8%

 

Boeing said it delivered 114 aircraft in the second quarter, down 8.8% from 125 delivered in the year-ago period. It said its delivery guidance for the full year remains unchanged at 460-465. It delivered 481 aircraft in 2009 and by the midpoint last year had delivered 246; so far this year it has delivered 222. Second-quarter deliveries were led by 95 737NGs. It also delivered three 767s and 16 777s.

[Pieter C. 5]

Boeing Raises Global Outlook For Aircraft Demand

 

July 15, 2010

 

Boeing raised its forecasts for new plane demand on the growth of low-cost carriers, the replacement of less efficient aircraft and economic recovery.

 

The company said in a report on Thursday it expected 30,900 new planes to be ordered worldwide over the next two decades, up 6.5 percent from last year's forecast of 29,000.

 

It said the new orders would be worth USD$3.6 trillion, up 12.5 percent from the USD$3.2 trillion forecast a year ago.

 

"A slightly higher GDP (gross domestic product) forecast, an increase in replacement demand and the growth of low-cost carriers in emerging markets will help stimulate demand," Randy Tinseth, vice president for marketing at Boeing's commercial planes division, told reporters.

 

Boeing's market outlook to 2029 comes ahead of the world's biggest airshow next week at Farnborough near London.

 

The company forecasts that Europe will need 7,190 new planes by 2029, valued at USD$800 billion.

 

It expects world air traffic to grow by 5.3 percent a year to 2029, with passenger numbers rising 4.2 percent per year.

 

During that time, the Asia Pacific region will overtake North America as the largest market for air traffic in the world.

 

Rising and volatile fuel prices will continue to shape the aviation industry. Boeing expects the price of crude oil to be between USD$75 - USD$85 a barrel next year and between USD$70 - USD$90 a barrel over the next 20 years.

 

"Once oil is over USD$90 a barrel, alternative fuel sources become viable which would enter the market and bring the oil price back down to USD$90," Tinseth said.

 

The company will focus on cementing its Boeing 737 strategy by the end of the year and re-evaluate what it is doing with its Boeing 777, he added.

 

"Over the long term, we see the aviation industry as resilient and our long-term market outlook is very strong."

 

(Reuters)

[flee 5]

Boeing Co. said second-quarter earnings declined 21 percent on fewer plane deliveries, and reduced its projection for profitability at its defense unit on slower U.S. military spending.

 

Net income fell to $787 million, or $1.06 a share, the world’s biggest aerospace company said in a statement today. Boeing maintained its forecast for earnings for this year.

 

Airlines are placing more orders as they recover from the recession more quickly than expected, while militaries are under budget pressure, said Chief Executive Officer Jim McNerney. The Chicago-based company trimmed its forecast for the operating margin of its defense unit, which accounts for more than half of revenue, by half a percentage point to 9.5 percent in 2010.

 

“You’re seeing segments of the defense business show some serious weakness,” said Kenneth Herbert, an analyst with Wedbush Securities in San Francisco. “For many years, the defense business was a nice floor on valuations, but if that’s going to weaken further relative to expectations, that’s a concern for investors.”

 

Boeing will make up airliner shipments in the second half of the year to hand over as many as 465 jets and still may double full-year profit to as much as $3.80 a share, Chief Financial Officer James Bell said on a conference call.

 

The company raised its annual forecast for the commercial unit’s margin by 1 percentage point to as much as 8.5 percent.

 

Shares Drop

 

Boeing, second to Airbus SAS in commercial aircraft and to Lockheed Martin Corp. in defense contracting, fell $1.30, or 1.9 percent, to $67.32 at 4:15 p.m. in New York Stock Exchange composite trading. The shares has risen 24 percent this year.

 

Sales fell 9.2 percent to $15.6 billion in the second quarter, missing analysts’ $16.2 billion average estimate compiled by Bloomberg. Earnings beat the $1.01-a-share average estimate of 20 analysts.

 

The defense segment’s operating margin decreased 1.2 percentage points to 8.9 percent as sales fell in every area except military aircraft. That outpaced the decline in the commercial-jet division, where operating margin fell 0.5 percentage point to 9.2 percent.

 

The total backlog declined 1 percent from the end of March to $312 billion, as the defense unit’s deliveries exceeded new orders.

 

777 Output

 

Boeing, which gets the bulk of its payments upon delivery, shipped 8.8 percent fewer planes in the period amid a production gap between a new and old jumbo-jet model and delays due to defective seats from a supplier. The company also began cutting output of the 777, a plan put in place last year when orders collapsed during the recession.

 

Commercial production is set to accelerate starting next year because airlines are clamoring for new jets amid a pick-up in air-travel demand that Boeing said last week had spurred it to lift the internal orders forecast twice this year. The company also plans to begin delivering the latest 747 model and the new 787 Dreamliner by the beginning of 2011.

 

“We were expecting lighter revenue given the lower commercial-aircraft deliveries,” said Peter Arment, a Gleacher & Co. analyst in Greenwich, Connecticut, who recommends buying the stock. “The production ramp continues unabated and that ultimately is going to drive the earnings momentum at Boeing.”

 

Delivery Targets

 

Boeing had planned to hand over the first 787 to Japan’s All Nippon Airways by December, which would have been more than 2 1/2 years late, and to ship the first 747-8 to Cargolux Airlines International SA by then as well, more than a year behind schedule. McNerney repeated comments from earlier this month that both those goals may now slip into January, adding that the 747-8 bears a higher risk for a delay.

 

“On the 747-8, there are a couple of workmanship issues and a design issue or two that we’re working through,” McNerney said. The 787’s possible hindrances have to do with documentation for certification from the Federal Aviation Administration and longer down-time between tests while engineers change telemetry instrumentation, he said.

 

In 2011, sales will exceed this year’s projection of as much as $66 billion and operating cash flow will be more than $5 billion, recovering from zero this year, Boeing reiterated.

 

This year’s surge in orders -- already higher than all of last year -- will be “modestly less” than the record three- year run-up in purchases through 2007, McNerney said.

 

Source: http://www.bloomberg.com/news/2010-07-28/boeing-posts-21-drop-in-second-quarter-profit-after-delivering-fewer-jets.html

[Pieter C. 5]

Boeing May Take Fourth 747-8 Charge as Analysts See Next Delay

 

Boeing Co., whose engineers are redesigning a part on the new 747-8 jumbo jet, may announce a fourth financial charge for the aircraft and another delay that could make it almost two years late.

 

That announcement may include a delay of another 3 months to 10 months for a plane that’s more than a year behind, nine analysts said in a Bloomberg survey. Eight of the analysts also anticipate a charge ranging from $100 million to $1 billion, on top of the $2.04 billion in charges already taken.

 

“This is inexcusable -- they should know that airplane like any airplane they’ve ever built, and then some,” said Howard Rubel, an analyst with Jefferies & Co. in New York who has a “buy” rating on Boeing shares. “They’ll figure it out eventually. I just believe the cost and the delay will detract from what they wanted to accomplish.”

 

The Chicago-based company is completing the 747-8’s schedule as it continues to work through two of several issues that came up in flight testing, and it plans to update customers and investors soon, Boeing Commercial Airplanes President Jim Albaugh said in an interview.

 

Chief Executive Officer Jim McNerney said in July that the 747-8’s schedule was more at risk than the composite-plastic Dreamliner’s, which the company pushed back last month, saying it wouldn’t be delivered until the first quarter of 2011. Both planes were supposed to reach customers by the end of this year.

 

Six-Month Delay

 

The analysts in the survey predicted, on average, a six- month delay for the 747-8 and a charge against earnings of about $360 million.

 

It’s only the second plane in the company’s 94-year history to be in a “reach-forward loss position,” an accounting status the program entered at the end of 2008 that requires it to record future plane deliveries at no profit margin unless its profitability improves. It could require Boeing to record additional charges if the estimated loss increases.

 

Engineers are redesigning the 747-8’s inboard aileron actuator, a system on the wings that helps the plane turn and had moved up and down unexpectedly on one of the jets, Albaugh said.

 

They’re also testing new software this week to help control some oscillation, or vibration, experienced during the test flights and are “encouraged that we have a solution,” he said. Vibration can cause a plane to break apart if it amplifies to become the self-feeding motion termed flutter, which Albaugh said isn’t the case for the 747-8.

 

Wheel Well

 

Boeing also adjusted the angle of the main wheel well to address some buffeting during landings, Albaugh said. The two unresolved concerns, and dozens of more minor ones discovered since the plane’s maiden flight in February, are “all addressable issues, but take some time to resolve,” he said.

 

While Boeing had said that the 747-8’s initial woes were due to the Dreamliner siphoning away resources, Albaugh said the team is getting what it needs. The company has had to make more changes than expected to the fifth variant of the 40-year-old jumbo jet, he said.

 

The wing is the longest Boeing has ever built and supports a stretched fuselage that has 16 percent more room in the freighter model. The passenger version holds 51 extra seats, for a total of 467, and carries 26 percent more cargo. Both models use new General Electric Co. engines based on those developed for the 787 Dreamliner.

 

“There’s no such thing as a simple derivative,” Albaugh said in the Sept. 27 interview. “There’s some things you just can’t model, and that’s why you do the test program.”

 

The 747 was the world’s largest airliner until the Airbus SAS A380 superjumbo, which carries more than 500 passengers, entered service in 2007. The 747-8 offering was launched with an order from Cargolux Airlines International SA in November 2005.

 

‘Trouble for Airbus’

 

“The 747-8 was designed to cause trouble for Airbus, taking away purchases from the A380, but now I think it’s caused more trouble for Boeing,” said Rob Stallard, an analyst at RBC Capital Markets in New York. He has an “outperform” rating on Boeing stock.

 

Albaugh replaced the 747-8 program chief last month for the third time in three years, giving the job to Pat Shanahan, the head of all of Boeing’s commercial-plane production.

 

“I just wanted to get Pat, who has access to all the resources in the company, to drive this over the goal line,” Albaugh said. “I just want to get this done.”

 

Boeing has orders for 76 of the 747-8 freighter and 33 of the Intercontinental passenger version. Albaugh said Boeing is now in talks with three airlines about both models. The Intercontinental is scheduled to enter service with Deutsche Lufthansa AG at the end of 2011, a year later than planned.

 

Boeing has four freighters doing test flights from a base in Palmdale, California, because the 787 Dreamliner is using the Boeing Field testing center in Seattle. The company has begun building two Intercontinentals in the wide-body factory in Everett, Washington -- the world’s biggest building by volume, constructed specifically for the 747 in 1967 -- and is working on its 12th freighter version.

 

“We’re in the home stretch now,” Albaugh said. “We’ll be late on the 787, but once this airplane is delivered, our customers will be very pleased and will forgive us for being late, and the same is true on the 747.”

 

Source: http://www.bloomberg...-two-years.html

 

Regards,

flee

[flee 5]

Boeing Reports 2016 Third-Quarter Results and Raises Full Year Guidance

CHICAGO, Oct. 26, 2016 /PRNewswire/ --

• Strong operating cash flow of $3.2 billion; repurchased 7.6 million shares for $1.0 billion
• GAAP EPS of $3.60 and core EPS (non-GAAP)* of $3.51 on solid execution and tax items
• Revenue of $23.9 billion on timing of aircraft deliveries
• Backlog remains robust at $462 billion with more than 5,600 commercial airplane orders
• Cash and marketable securities of $9.7 billion provide strong liquidity
• 2016 revenue guidance increased $500 million on higher deliveries
• 2016 GAAP EPS and core EPS (non-GAAP)* guidance increased $0.70 for additional tax adjustment

Press release:

http://boeing.mediaroom.com/2016-10-26-Boeing-Reports-Third-Quarter-Results-and-Raises-Full-Year-Guidance