Liveblog: Boeing Investor Day 2011

FA 271414 by Leo Dejillas edited by Liz Matzelle_560.jpg
Boeing’s yearly gathering of financial analysts in Seattle gets underway today at 11 AM ET/8 AM PT this page will be bringing you liveblogged coverage of the commercial presentations from CEO Jim McNerney, CFO James Bell, Boeing Commercial Airplanes CEO Jim Albaugh, 787 vice president and general manager Scott Fancher.
In many ways, Boeing uses its investor day to set the stage for its air show announcements during the summer, paving the way for its next moves. If the Paris Air Show is the Superbowl, this is the aerospace NFL draft. Today should bring official confirmation of the early flights of the Rolls-Royce ‘Package B’  engine on ZA004, and possibly schedule clarity on 787 ETOPS and F&R testing. 
Additionally, we will likely get some additional color on 747-8F delivery schedules, with nagging questions about readiness for the mid-year delivery, including the de-ice system and Honeywell flight management system readiness.
The presentations will all be webcast, and questions from analysts are expected to focus on the future of new airplane programs (737RS/797, 787-9, 787-10, 777NG), 787 delivery schedule, profitability, order book stability and production readiness. Follow updates below the fold and on twitter for the latest on #BoeingID.
Updates available after the jump.
Photo Credit Boeing

UPDATE 11:21 AM: Boeing CEO Jim McNerney, speaking generally, says the company is evaluating the market, timing and technology options on the 737 replacement. He also says both the 747-8 and 787 are in their “final phases of flight testing” with highes-risk tests completed and solutions implemented on that came out of flight test discoveries on both programs. More general comments on looking at 787-10 and 777NG as future program to follow the 787-9.

UPDATE 11:48 AM: McNerney says the company has two years of visibility on market/suppliers for its ramp ups. Allows time to adjust, but aims for ramp to be sustained 5-7 years. Also, McNerney acknowledged that Boeing “booted” the 787 supplier tracking process and “unfortunately we paid billions upon billions in the learning process.”
Tech Note: The feed is highly unreliable the moment and hearing what is going on is choppy at best.

UPDATE 11:56 AM: McNerney largely rules out twin-aisle 757-sized 737 replacement. “We’re getting a lot of encouragement on doing a larger narrowbody” but the replacement would be  modestly bigger, “not a step function change in the airplane” and doesn’t rule out addressing the market segment above -700 and -800 in the future. Overall, the new narrowbody would address “the heart of the market” and be slightly bigger than today’s market. Will make a decision in the next nine months on a new jet, but re-engining is an option if Boeing can’t settle on a new jet.
UPDATE 12:06 PM: Boeing CFO James Bell says that the company will disclose its 787 accounting quantity size at the time of first delivery.
Historical Note: Every single new Boeing program has has an accounting block of 400, including 747, 757, 767, 777 and 737NG. It is widely believed that 787′s block could be as high as 1000. 
UPDATE 12:28 PM: James Bell says Boeing will have about 40 787s built at the the of first delivery to ANA. 
Today, Airplane 41 is in final assembly, making 35 production aircraft built. At a rate of two aircraft per month, Boeing should reach 40 787s built by around July/August, with two built in June and two more built in June. This meshes with Z23, but it’s not clear how ETOPS/F&R testing will factor into completing flight test and achieving certification, as well as any required rework resulting from that phase.
UPDATE 12:39 PM: Boeing Commercia Airplanes CEO Jim Albaugh is up next at about :45 past the hour. The connection and audio has been spotty at best this morning, and there are sizable chunks that have been missed. Let’s hope traffic on the webcast thins a bit for the second half of commercial briefings.
UPDATE 1:01 PM: BCA CEO Albaugh says that 40% of 2011 orders will be for widebody aircraft, compare to 20% in 2010. 
UPDATE 1:06 PM: Albaugh says the company will make a decision on moving to 42 737s per month this summer. Boeing CFO James Bell had previously said a decision on rate 42 would come in 2014 after 38 per month had been achieved. The company’s market outlook is expected to grow the number of aircraft needed between 2011 and 2030. 
UPDATE 1:15 PM: 787 Airplane 9 (ZA102) has been configured for ETOPS/F&R, which will start in June and run around 300h. 4% of certification requirements outstanding on Rolls-Royce airframe-engine combination, 96% complete.
UPDATE 1:28 PM: “There really isn’t a competitor for the 777-300ER.” Expectation is that A350-1000 won’t be ready until the end of this decade or early next decade. Albaugh makes first formal mention 787-10X – dubbed as such – adding 43 seats to the 787-9. ”Same wing, same engine, more people” adding “I believe this will be an airplane we will probably do.”
Also, Albaugh makes first public reference to the 737 NG+, continuous improvements on today’s 737. He adds that a re-engined 737 would be available in 2016 or 2017. Says a new airplane would deliver 20% fuel efficiency and cash operating cost improvement “well into double digits”.
UPDATE 1:40 PM: Albaugh: Production rate increase to 777 beyond 8.3 “would be surprising” but also floats a 787 increase beyond 10 per month: “If we can get to 10, we can get to 11.” Emphasizes it’s not an announcement, but this is the first time since 2007 that a Boeing executive has discussed pushing 787 beyond 10 per month.
UPDATE 1:43 PM: In listing insourced items on the 787-9, Jim Albaugh says the aircraft’s horiztonal stabilizer will be built at the Boeing Development Center. 70% of design work on the 787-9 will be done by Boeing.
UPDATE 1:54 PM: In a question from Joe Campbell at Barclays Capital, Albaugh dodges shape of 787 ramp, says to ask 787 VP/GM Scott Fancher. Albaugh says it’s too soon to move from rate 2 to 2.5 with the amount of outstanding jobs, but expects that to advance this summer.
UPDATE 2:02 PM: Scott Fancher defines functionality and reliability (F&R) testing: 787 will operate under degraded systems on board to demonstrate robustness of the airplane in the presence of multiple failures. F&R will take around 300h, within those 300h, ETOPS testing will take place concurrently and is measured by test points, not hours and will begin in early June. 
UPDATE 2:07 PM: After F&R the aircraft will move to SROV (service ready operational validation) which will see ZA002 travel to Japan and join in with ANA’s operations. This will take place in the coming months. This will be followed by the Program Statement of Compliance (PSOC) which is a final review by the FAA before the final type certificate is granted ahead of delivery in the third quarter.
UPDATE 2:23 PM: Fancher says that the 787-9 side-of-body reinforcement has been tested and the changes from the 787-8 are mostly around producibility, manufacturing and assembly, and will eventually be fed back into the 787-8 design.
– That’s a wrap, folks! Thanks for tuning in. Now to turn this into full articles! –

8 Responses to Liveblog: Boeing Investor Day 2011

  1. Karl May 24, 2011 at 3:02 pm #

    Awesome job Jon. I try to tune in to the webcast but had a difficult time making anything up if and when I got to hear anything. Appreciate the quickness and explanations of every update you provided us.

  2. Guru Josh May 24, 2011 at 4:32 pm #

    So ANA will get ZA002 to play with “in the coming months” instead of a real first delivery?

  3. Roman May 24, 2011 at 5:17 pm #

    @Guru Josh – That’s not what was said at all. Instead, ZA002 will get to play with ANA “in the coming months.” This will be done as part of Service Ready Operational Validation testing – in other words, as part of the certification process. All of this will take place prior to 1st delivery.

  4. CM May 24, 2011 at 8:23 pm #

    @Guru Josh,

    The SROV is a win-win situation for both Boeing and ANA and has always been a part of the flight test plan. It gives ANA a chance to put the airplane into non-rev operations within their system, which is invaluable to the airline. At the same time, it provides useful information to Boeing as they finish preparations to support the 787 when it goes into service in Japan. It would be pretty odd if ANA said to Boeing “I don’t want an airplane until it is the ‘real first delivery’”.

  5. CM May 24, 2011 at 8:23 pm #

    @Guru Josh,

    The SROV is a win-win situation for both Boeing and ANA and has always been a part of the flight test plan. It gives ANA a chance to put the airplane into non-rev operations within their system, which is invaluable to the airline. At the same time, it provides useful information to Boeing as they finish preparations to support the 787 when it goes into service in Japan. It would be pretty odd if ANA said to Boeing “I don’t want an airplane until it is the ‘real first delivery’”.

  6. wuzafan May 25, 2011 at 12:55 am #

    the picture of the 747-8 and the 787-8 is worth a thousand words. the 747 looks like they stretched the forward body too much, it has lost some of the graceful lines of the original.
    but it the wing deflection of the 787 that tells the real story. notice the 747-8 wing deflection is normal for boeing, and , for alum wings. the overly excessive 787 wing deflection shows that the airplane will have dutch roll issues, and, since the wing is more parabolic than flat, the lift generated by the wing is not efficient, and, shows much wasted span. why would boeing screw up so bad with its wing deflected so much,? efficient lift, is for all of the lift, vertical to the wing’s surface, be used to lift the airplane.
    but, most boeing airplanes have 6-7 degs of dihedral, for stability reasons. anything more than that, the lift generated by the lifting surface, points somewhat inboard, and not, up. wing span costs both weight and $, so, to waste so much of it by its being deflected nearly parabolically, means they have some serious design issues they either refused to fix, or, did not have time to, before the schedule said to stop.

  7. Wuza what?! May 25, 2011 at 2:41 pm #

    hmmmmm….you obviously know NOTHING about aerodynamics. The difference is due to many factors, not the least of which is the fact that the 747-8 has 2 outboard engines hanging of the wing. You might have missed that obvious fact.

    By the way, the 747-8 is beautiful and retains its graceful lines inspite of the changes to the airframe. It is a whole lot more beautiful than that beached whale called the A380. Seriously, it is one of the ugliest aircraft built in the last 30+ years.

  8. wuzafan May 26, 2011 at 12:43 am #

    to snogs and what? let me further explain what simple physics may be beyond your grasp. also, what?, my comments were mainly directed at the pathetic 787 wing design, re-read my first post.
    if you go back to elementary wing design, they say to reduce induced drag, you should have a more elliptical wing loading. a more triangular loading would cause more drag, hence a less efficient design, that would have less range and more fuel burn. have i lost you yet?
    go back and re-read your comments now. so designers can choose to make trade offs in many things, but this is not one area they want to permanently cripple a long range point to point airplane by making the wing lift be so triangular.
    in this case, the 787 wing deflection is so excessive that the wing lift is forced inboard and, cannot be anything but triangular. notice any pics of the 767, 777, 747, and you will see the wings have small deflections at cruise, then look at the 787. from what i have read here are flightglobal, boeing has already had to back off a couple of times on their range goals, something on the order of 800-1,000 nmi. it does not take much of a shift to cause a huge loss in performance. i have read that the 787 is way over weight, and that alone will cause it to lose performance.