For Boeing, the year 2017 dawned with a long list of concerns facing the commercial market. Net order totals for the company’s commercial aircraft had dropped for two years in a row. Demand for widebody aircraft 12 months ago, in particular, seemed even more worrisome, leaving Boeing struggling to fill production slots on the 777 and 747 lines last January and putting in doubt a proposed ramp-up next year to 14 787 deliveries per month.
Twelve months later, the status of the 747 assembly line has, if anything, grown more severe, but otherwise Boeing enjoyed a commercial rebound while avoiding any serious missteps in non-military development and production programmes.
Boeing’s orders and deliveries totals for 2017 show solid improvements, having set new records for jet deliveries at 763 and an overall backlog at 5,864. The year's net orders, at 912, fall shy of the feverish, three-year run of four-digit order tallies from 2012 to 2014, but stand 37% higher than the 668 net orders of 2016 and 19% higher than the 768 of 2015. Demand for twin-engined widebodies also showed new strength, with 169 net orders signed combined, including 94 for the 787 and 60 for the 777.
The rebound helped Boeing justify a decision in September to increase output on the 787 line to 14 per month in 2019 and hold planned production rates steady on the 777 through the transition to the re-engined 777X model that begins in 2020.
Airbus orders and deliveries are set for release next week, but Boeing has set a high bar for its competitor to match. A late-December flurry of order activity in Seattle added 68 more aircraft to Boeing's final sales total, including deals for 60 737s, five 787s and three 777s.
Meanwhile, Boeing didn’t lose a step in production despite introducing the 737 Max 8 into commercial service. The company executed a rate increase to 47 deliveries per month at mid-year while delivering 74 737 Max 8s, or 14% of the overall total of 529 737s, itself another record. Boeing also kept 787 deliveries on track as the 787-10 entered flight testing. Among the development projects, the only blemish appeared to be no sign of the GE Aviation GE9X for the 777X entering flight testing as planned by the year, although the prototype engines were delivered to the engine manufacturer’s flight test facility in Victorville, California in late November.
By any measure, however, Boeing can remember 2017 as a year of improvement and growth in several areas.
“I’m sorry for the lack of drama,” Boeing vice-president of marketing Randy Tinseth noted with some insincerity on a teleconference call with journalists, “but the team performed extraordinarily well.”
Boeing’s commercial division is left with two critical questions to answer in 2018. Can the progress on orders and deliveries be sustained for another year? And how much longer can the 747-8 survive?
On the first question, Tinseth believes the market is trending in Boeing’s favour. In 2017, Boeing benefited from a global economic surge, with 3% growth in gross domestic product fueling a 7-7.5% jump in airline passenger traffic. Tinseth pointed to economic forecasts predicting a similar growth level for GDP this year. IATA has released a forecast for 2018 predicting airlines will achieve $38 billion overall in profits, higher even than the $34 billion estimated profits by the sector this year.
For Tinseth, the second question about the 747-8’s fate is wrapped up in the answer to the first question. The air cargo market – the key driver of demand for the 747-8 Freighter variant – enjoyed a dramatic rebound in 2017, seeing demand grow by nearly 10%, Tinseth says. The spike in overall air cargo traffic proved vital to the fortunes of the 777 Freighter, but had no impact on demand for the 747-8F. Boeing’s customers cancelled two more orders for the 747-8 than they collectively ordered in 2017, further eroding to the backlog for the type to only 12 aircraft, or two years of production.
The 747-8F seemed poised for cancellation only 15 months ago, until an order by UPS for 14 747-8Fs in October 2016 revived the type unexpectedly. Tinseth insists that interest in the 747-8 persists among existing operators of the 747-400F and 747-8F. So far, any discussions has not led to new orders despite the air cargo market’s rebound last year.
The only hope for the 747-8F is if the air cargo rebound in 2017 becomes a reliable trend this year.
Potential customers are “looking for not only the turnaround we’ve seen so far,” Tinseth says, “but they want to make sure that it’s sustained”.
This story has been updated to correct percentages in the third paragraph
Source: Cirium Dashboard
