Boeing 787 (partie 1)

Data obtained by FlightBlogger show Boeing's historic order backlog for the 787 was based partly on steep discounts driven by now-discarded design and manufacturing assumptions. Cost overruns, penalty payments and supply chain changes adopted in the last two years will force Boeing to achieve unprecedented cost-savings for the widebody to turn a profit even after delivering the current 846-aircraft backlog.

With first delivery nearly three years behind schedule, the cost to build each 787 has skyrocketed from its original foundations built upon dramatically lower and more predictable production costs, say company insiders.

In the race to sign up customers between 2004 and 2006, airframe prices averaged just below $76 million, a price that does not include the the $20 to $30 million GENx or Rolls-Royce engines, according to pricing data.

While Boeing will never disclose the actual prices its mega-backlog of 787s were sold for, Jim Albaugh, CEO of Boeing Commercial Airplanes, believes the 787 was sold for far less than it was worth, as acknowledged in a recent interview: "I think we gave away some of the value of this airplane to a lot of our customers."

Though that statement, say customer and company sources, as well as and industry analysts, is an understated acknowledgment that hints at how Boeing's 787 backlog was built; stimulated by not only by huge future growth in air traffic and precipitously rising fuel prices, but a steady and strategic drop in the price of the aircraft.

Boeing, which did not comment on the actual pricing figures, says it is "constantly evaluating our value proposition in the marketplace. Prices are adjusted based on the value our products provide to our customers as well as our positioning in the competitive environment."

In late 2004, Boeing started employing aggressive sales tactics, according to sources familiar with the pricing discussions, blunting the ambitions of the original Airbus A350, then a significantly upgraded A330. That aggressiveness, led by then sales vice president Scott Carson, with a mandate from then-CEO Harry Stonecipher, then-Commercial Airplanes Chief Alan Mulally and the Boeing board of directors, saw prices slashed on the company's composite jetliner.

In the more than three and a half years since its first 787 began assembly, the prevailing wisdom about Boeing's woes have centered upon moving past manufacturing design issues, completing extensive rework of production airframes, certifying and delivering the first units for revenue service and building a steady industrial ramp up at its Everett and Charleston facilities; all while re-balancing its supply chain as it develops the 787-8's larger successor.

Although each is a formidable task, the pricing data indicates Boeing also must overcome five-year-old pricing decisions on more than 300 787s still in the backlog.

The 2004 through 2006 airframe prices charged to airline customers ranged between $83.5 million and as low as $65.7 million for the 787-8, for one higher volume deal with a blue chip customer. Prices for the larger 787-9 were cut significantly as well, but the sales balance in the early years of the program was weighted heavily toward the smaller -8.

There remains great risk and opportunity to ensure the 787 - the company's fastest selling jetliner - becomes the cash cow Boeing hopes it will become. Few doubt the market success of Boeing's flagship program, though the profitability and margins remain open questions as the recurring production costs, by the company's own admission, lack clarity.

Boeing declined a request for executives currently leading the program, as well as Carson, though the company did comment on a point-by-point basis.

Now that the Holiday are over, Boeing is trying to pick up the pace for the lost time due to the fire on ZA002. Boeing has been flying ZA001 and/or ZA004 since January 3rd though they haven't been flying very long duration flights (longest so far is about 5 hours).

However, in the coming days we should see more 787 rejoining the test flight program though for the next one week at least these will be only Boeing test flights and certification test flights.

According to information from sources, ZA005 should be flying again on January 9th (Sunday), and ZA002 will be flying again on January 11th. ZA006 will fly on January 14th and ZA003 will be flying again on January 16th.

More importantly, ZA004 is projected to restart certification flight tests as early as January 14th with ZA001 and ZA006 projected to follow on the 15th, ZA002 on the 16th and ZA005 on the 18th.

Also of significance is that ZA102, the first production airplane to fly may fly as early as January 15th and as late as January 24th. This airplane is out on the flightline at Everett. It is around this time that Boeing will be releasing it's 2010 full year financial results so there would be more that will probably be siad about the schedule at that point though everyone is still waiting to hear about the revised delivery schedule from Boeing.

Note that this schedule is still a projected schedule and things can still change given Boeing continued discussions with the FAA.