Boeing released their SEC 10-Q filing today and hidden among all the charts and commentary was a suggestion that our beloved 747 aircraft may be coming to the of her reign as Queen of the Skies.
In the excerpt below, Boeing talks about the lack of orders and a slow down in freight demand being the primary reasons that they are considering closing the 747 production line. Also reiterated was a previous announcement that 747 production would slow from 1 a month to .5 month in September, basically meaning that only 6 747s will leave Everett each year until production ceases. They also canceled plans to return to 1 747 produced per month starting in 2019.
From Boeing’s 10-Q Release on July 27, 2016:
747 Program Lower-than-expected demand for large commercial passenger and freighter aircraft and slower-than-expected growth of global freight traffic have continued to drive market uncertainties, pricing pressures and fewer orders than anticipated. As a result, during the second quarter of 2016, we canceled previous plans to return to a production rate of 1.0 aircraft per month beginning in 2019, resulting in a reduction in the program accounting quantity from 1,574 to 1,555 aircraft. This reduction in the program accounting quantity, together with lower anticipated revenues from future sales and higher costs associated with producing fewer airplanes, resulted in a reach-forward loss of $1,188 million in the quarter. The adjusted program accounting quantity includes 32 undelivered aircraft, currently scheduled to be produced through 2019. We previously recognized reach-forward losses of $885 million and $70 million during the second half of 2015 and the first quarter of 2016, respectively, related to our prior decision to reduce the production rate to 0.5 per month and anticipating lower estimated revenue from future sales due to ongoing pricing and market pressures. We are currently producing at a rate of 1.0 per month, and expect to reduce the rate to 0.5 per month in September 2016. We continue to have a number of completed aircraft in inventory as well as unsold production positions and we remain focused on obtaining additional orders and implementing cost-reduction efforts. If we are unable to obtain sufficient orders and/or market, production and other risks cannot be mitigated, we could record additional losses that may be material, and it is reasonably possible that we could decide to end production of the 747.
Keep in mind that these kind of disclosures are normal for companies as part of their Safe Harbor disclosures and basic ‘CYA’ strategies so that investors don’t retaliate will lawsuits suggesting they were mislead. But this is the first time that Boeing has had such ‘strong’ language in a 10-Q when it has come to the 747. Trust me, I read 10-Qs as part of what I do in real life, and the Boeing versions are among the ones that are at the top of my list when they are released.
With this kind of writing on the wall, I am of the opinion that the 747 has already been canceled in the minds of Boeing Executives. You don’t put this kind of language out to shareholders if you’re not serious. Today’s announcement is basically the warning shot so that we are not surprised when a future announcement makes it official.
This issue could potentially affect the Air Force order for the 2 or 3 747s that are slated to replace the current aircraft serving as the US President’s transport.
If I could write a fitting end to the 50 year legacy of the 747, I would close the program in dramatic fashion by having the last 747s to leave the production line to be the ones that would serve at the President’s pleasure.
Over the past week Lufthansa Group made 3 separate announcements concerning the fleet, including new orders and an update for existing orders.
The first announcement dealt with SWISS and their decision to order 3 additional 777 aircraft. These 777-300ERs will join the 6 777s already on order from Boeing and will begin to show up in the fleet during 2016. The 777 aircraft will allow SWISS to start retiring a portion of the 15 A340-300 aircraft currently in service.
SWISS now has 9 777-300ER aircraft on order.
Next, Lufthansa provided an update on their A350 order. Beginning at the end of 2016, the first of 25 A350s will start showing up in the fleet with the first handful of the type operating out of Munich and will allow for the gradual phase out of A330 and A340 aircraft. Ultimately Lufthansa will have 25 A350s in the fleet based in Frankfurt and Munich. One outstanding feature of the A350 is the fact that it will only take 3/4 of a gallon of fuel to carry one passenger 62 miles (2.9 liters per 100km). That equates to a 25% increase in fuel efficiency over most new aircraft today AND it’s 30% quieter.
LH’s new A350 will bring a distinct new look to the fleet in Frankfurt and Munich.
To round out the busy week of announcements, SWISS announced that it will be the first operator of the new Bombardier CS series beginning in the first half of 2016. In 2009, SWISS was announced as the launch customer for the type.
SWISS’ new Bombardier CS100
For those of you attending the Paris Air Show, Bombardier will have a CS100 on display in SWISS colors. Bombardier also plans to bring the SWISS CS100 to Zurich after the air show as part of its tour. Hopefully, all of the delays are behind the program and we can finally start seeing these new planes replace the aging Jumbolinos!
A routing not seen very often…..
In part one, I focused primarily on the events leading up to the delivery flight of Lufthansa’s D-ABYT, including the Delivery Luncheon and a modest ceremony acknowledging the formal acceptance of the aircraft by Lufthansa. I say modest because this flight was taking place the day following the Germanwings tragedy. Lufthansa and Boeing appropriately toned down the energy around the delivery ceremonies.
Part II will focus on the actual flight which amounted to approximately 9 hours of ‘Avgeek’ bliss. When else can you have most of a 747-8i aircraft available at your disposal to explore? I spent more than a few minutes playing with cabin lighting controls, galley equipment, and the like. Like a kid in the proverbial candy store……
One of the biggest and most obvious differences with this flight is the fact that the Economy Class cabin was void of any seating so it gave us a perspective that most will never have and hopefully my photos capture some of that. The two observations that come to mind is realizing just how big the 2 economy cabins are and the amount of curvature of the fuselage at the back of the aircraft. It is one thing to see the curves from outside the aircraft, its another to see the perspective from within cabin.
As I mentioned in Part I, approximately 70 passengers were aboard the flight and most of them were Boeing and Lufthansa personnel along with a few members from the German media. I believe I may have been the only American aboard the aircraft that represented the US Media (scary thought isn’t it?).
About an hour before the flight, the pilots and cabin crew boarded the aircraft to prepare it for passengers. In speaking with the cabin crew, it was the first time that any of them had been on a delivery flight so they were looking forward to the experience as much as we were. Their biggest concern was making sure that the Lufthansa hospitality would be the same as conventional flights. They would not disappoint…..
D-ABYT’s Log Books and Manuals were brought aboard with the flight crew.
With an open Business Class seating policy on the main deck, it was fairly a quick and efficient boarding process. As I mentioned in part I, the Boeing Delivery Center is considered an airport and we were required to pass security screening just as if we were at a typical airport.
Once passengers were seated, the cabin crew took over and proceeded to treat it like any other flight which included a choice of pre-departure beverages including champagne, water or juice and a small snack. Soon after the beverage service, the IFE played the familiar Lufthansa Safety Video, the aircraft was pushed back from the gate, and we would be underway.
Cabin crew prepares pre-departure beverage service.
Departing from Paine Field is obviously a very unique experience since it is unlike any airport that most people will ever see. Covering the ramp area are essentially billions of dollars of brand new aircraft, many who may have only flown once or twice as part of Boeing’s testing regiment to ensure air worthiness. In addition, there are several aircraft that are dressed in their ‘greens’ and have yet to have their engines started or be painted. It is certainly a one-of-a-kind place and any self-respecting aviation enthusiast should visit at least once.
As we were brought out the threshold of Runway 16, the ground crew did something that I’ve never seen before (obviously…). Most of you are familiar with the red ‘Remove Before Flight’ flags that are usually attached to points that require inspection before the plane can depart. In our case, the ground crew had removed all of these flags from ‘YT’ and had laid them out for the pilot to confirm that all flags were accounted for. These flags were then loaded on the aircraft and this specific set will stay with the plane for as long as it is in service.
D-ABYT’s personal set of “Remove Before Flight” Flags.
Boeing’s Ground Crew sends us off…..
Once we were under our own power, the aircraft entered the runway where we sat for a few minutes allowing the engines to come to temperature. Once cleared, we rolled down the runway towards Frankfurt and since I intentionally picked a window seat, I was able to record the departure.
How many departure videos from Paine Field have you seen from inside the aircraft? In the video clip below pay special at the 1:55 mark of the video…… our pilot executes a ‘Wing Wave’ much to the delight of passengers. Apologies for a few moments where the video blurs, I was paying more attention to the outside than to the view finder.
Once at cruising altitude, the flight really took on a unique flavor. The flight crew was quickly taking care of dinner service so those wanting to rest or work could do so quickly. The catering was provided by Boeing and I must admit it was very good. Considering that the aircraft’s galley equipment was not yet operational, insulated trollies were used to store the meals. We even had the option between Steak (which turned out to be Filet) or Fish along with a favorite local beer. I went with the Filet.
You don’t need bone china to enjoy a meal!
Once dinner was over, I would spend the majority of the flight exploring the aircraft and enjoying the company and conversations with Boeing and Lufthansa personnel. It turned into a valuable opportunity to network and gain insights that are not normally available outside the companies.
As I mentioned earlier being aboard this flight provided perspectives that most passengers will never have especially when it comes to having access to empty cabins and cabin equipment. Hopefully the photos will do their job and give you an idea of just how unique this experience was for me. I’ll end my words here and let the photos tell the story. I’ll come back with Part 3 that will look at various bits of outstanding swag that was given to us, along with what is possibly the best and most complete amenity kit that I’ve ever seen. Stay tuned!
Looking towards the rear of the aircraft in the rear Economy Cabin.
The Rear Economy Cabin. The rope down the center is there to hold on to in the event of turbulence.
Looking towards the front of the aircraft from the rear Economy Cabin. The curve of the fuselage is apparent without seats.
The ‘forward’ Economy cabin….notice the leg room? The front part of this cabin will feature the Premium Economy seats.
The upper deck Business Class cabin.
A pair of Ovens and Coffee Makers. Cost of the coffee makers? $12,000 each.
Having no seats to contend with, I had the opportunity to capture angles and scenes that would normally not be possible had the seats been installed. The following shots of the wing and engines would be difficult to take if seats and passengers were in the way.
I Even had the chance to witness the ‘Northern Lights’.
Capturing sunrise from the cabin. This angle would not be possible with seats in the way.
The engine is as much a piece of art as it is an engineering masterpiece.
Same engine, now at sunrise over the Atlantic.
The substantial curvature of the right wing is impressive.