Travel Service 737 Max 8 (click here) Boeing South Carolina Facility (click here)
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News Item A-1: Boeing booked firm orders* for 289 commercial airplanes from 15 customers in December 2016, valued at approximately $32.6 billion at list prices (*Note: This does not count military, government or private customer orders or deliveries in its commercial airplane tallies. All quoted order values are based on current list prices). For 2016, Boeing’s gross commercial aircraft order total was 803 airplanes valued at $108.6 billion at list prices. Taking full-year reported changes (cancellations) into account, Boeing logged net orders for 668 airplanes through December 31.
In December, Boeing delivered 66 commercial airplanes to 31 airlines, 5 lessors and 4 unidentified customers. Boeing delivered 728 commercial airplanes in 2016. An unidentified customer’s order for 100 737 MAX (variant unspecified) capped off the month’s bookings on December 30, valued at approximately $11 billion. A separate unidentified customer placed an order December 28 for 75 737 MAXs, valued at approximately $8.3 billion. A 3rd unidentified customer placed an order for 61 737 MAXs December 27, worth approximately $6.7 billion. All totaled, 6 unidentified customers ordered 264 737 MAXs; another 4 unidentified customers ordered 13 737-800s; and 2 additional unidentified customers ordered 3 787-9s. UK leisure airline Jet2 (JT2) ordered 4 737-800s, valued at $384 million, Air Tanzania (TNZ) ordered a single 787-8 and Uzbekistan Airways (UZB) ordered 4 787-8s during the month.
Boeing registered changes (cancellations) for 70 737s and 18 787s during the month, bringing the December net order total to 201. Boeing’s December deliveries included 6 737-800s to Southwest Airlines (SWA); 6 airplanes to United Airlines (UAL) (3 737-900ERs, 2 777-300ERs and 1 737-800); and 3 airplanes each to American Airlines (AAL) (2 737-800s and a 787-9) and Emirates Airline (EAL) (all 777-300ERs). Additional 777-300ER deliveries during the month went to Kuwait Airways (KUW) (which took 2), and single deliveries of the model to Air China (BEJ), USA lessor Intrepid Aviation, and 4 separate unidentified customers. Additionally, Korean Air (KAL) took delivery of a 777F freighter. Air Europa (ARE) took delivery of 2 787-8s during the month. Avianca (AVI) and Royal Air Maroc (RAM) each took delivery of 1 787-8 as well. Additional 787-9 deliveries for December included 1 each to Aeromexico (AMX), All Nippon Airways (ANA), British Airways (BAB), Hainan Airlines (HNA), Japan Airlines (JAL)/(JSA) and China’s Xiamen Airlines (XIA).
News Item A-2: (GE) Capital Aviation Services (GECAS) (GEF) announced January 4 that it booked an order in December 2016 for 75 Boeing 737 MAX 8s. The order is valued at $8.25 billion at list prices. The new order increases (GEF)’s order book for 737 MAX 8 airplanes to 170, the largest number of bookings for the model by any leasing company. The (LEAP-1B) is the sole-source engine for the 737 MAX, which is scheduled to enter service in mid-2017 with launch customer Southwest Airlines (SWA).
The (GEF) deal brings Boeing’s order total for 737 MAX airplanes to 3,419. As of November, the rival Airbus A320neo (another re-engined narrow body) had received about 4,800 orders from 88 customers.
News Item A-3: Boeing (TBC) confirmed January 10 that South Korean low-cost carrier (LCC) Jeju Air (JJA) is the previously unidentified customer behind a December 2016 order for 3 737-800NGs, valued at $288 million at current prices. It is (JJA)’s 1st direct-purchase order with Boeing. (JJA) operates an all-leased fleet of 26 737-800NGs. The 737-800NG seats 162 – 189Y passengers and has a range of 5,700 nm. “This acquisition is a major step in our growth strategy [and will] further strengthen our position as a leading (LCC) in NE Asia,” Jeju Air (JJA) (CEO) Ken Choi said.
(JJA) was established in 2005 as Korea’s 1st (LCC) with operations beginning in 2006. (JJA) operates 40 domestic and international routes with approximately 150 daily flights.
News Item A-4: Czech leisure carrier Travel Service (TVS) has finalized an order for +5 additional Boeing 737 MAX 8s, valued at $550 at list prices. (TVS), which is the Central and Eastern European launch operator for the 737 MAX 8, is scheduled to receive 30 direct-purchased and leased 737 MAX aircraft starting in 2018. (TVS) placed an order for 3 of the type at the Paris Air Show in 2013 and operates a mixed fleet that includes 32 737s. In January 2016, (TVS) leased a further 16 737 MAX 8s. A company spokeswoman said it aimed to operate 40 737 MAX 8s by 2025. Travel Service (TVS) operates scheduled flights under the SmartWings (SMW) brand.
News Item A-5: “Norwegian Airline to Detail Ireland – USA plans in Early 2017” by Victoria Moores (ATW) Plus, December 6, 2016. Irish long-haul, low-cost carrier (LCC) Norwegian Air International (NAI) is to fly from Cork and Shannon and open 2 USA bases after securing its USA foreign air carrier permit. “It [the USA Department of Transportation (DOT) clearance granted December 2] surprised me. I’ve been waiting for 3 years, so it shouldn’t have come as a surprise,” Norwegian (NWG) (CEO) Bjorn Kjos said on the sidelines of the “Future of Air Transport” conference in London.
Fast-expanding low-cost carrier (LCC) Norwegian (NWG) plans to take 9 Boeing 787-9s and its 1st 737 MAX in 2017, using some extra capacity to add its 1st long-haul, low-cost flights between the UK and non-USA destinations. (NWG), the Oslo-based (LCC) said 2017 will be its “busiest ever year,” with >30 airplane deliveries, including its 1st 737 MAX, which is scheduled to arrive during the summer. “(NWG) will become the 1st European airline to fly the new Boeing 737 MAX this summer to kick-start a new era in transatlantic travel. These single-aisle airplanes can fly longer distances, offering customers potential never before seen routes from Europe to the east coast of the USA at very attractive fares. Norwegian (NWG) plans to announce a series of transatlantic routes from UK cities to the USA east coast early in 2017,” (NWG) said.
This summer, (NWG) will increase its UK – USA flights by +55%, totaling 34 direct weekly flights from London Gatwick. These routes include Fort Lauderdale, Los Angeles, New York, Oakland – San Francisco and Orlando. While (NWG) already serves Bangkok from Oslo, Copenhagen and Stockholm, all its UK-originating long-haul routes are transatlantic. “(NWG) plans to announce its 1st [UK] non-USA long-haul routes later this year, once plans are finalized.” In late 2016, (NWG)’s Irish subsidiary Norwegian Air International (NAI) was granted a USA foreign air carrier permit after 3 years of waiting, giving (NAI) access to transatlantic flights using an European Union (EU) air operator’s certificate (AOC).
News Item A-6: Boeing (TBC) delivered the 500th 787 Dreamliner, a 787-8 to Colombia flag carrier Avianca (AVI), during the week of December 22, 2016.
News Item A-7: Indian low-cost carrier (LCC) SpiceJet (ROJ) has substantially increased its commitment for Boeing 737s, with a major order for the forthcoming 737 MAX 8. (ROJ) already has an order for 42 737 MAX 8s on Boeing’s books. The new order, announced January 13, adds a further 100 MAX 8s that were booked at the end of 2016, 13 additional MAXs that Boeing’s had previously attributed to an unidentified customer, plus purchase rights for +50 more airplanes. This takes SpiceJet (ROJ)’s orders and commitments to a total of 205 airplanes. Gurgaon-based (ROJ) already operates a fleet of 32 Boeing 737-800 and 737-900ERs, together with around 20 Bombardier Dash 8-400s (in service or on order for shorter sectors).
News Item A-8: (SWA) was eager to sign up as the “launch customer” for Boeing (TBC)’s new 737 MAX. But it won’t be the 1st to fly or even receive the new airplane. That honor will go to smaller low cost carrier (LCC) Norwegian Air Shuttle (NWG). (NWG) will receive the 1st MAX 8 in May, with flights starting as early as June. As Boeing’s largest customer for the 737, (SWA) has been involved in the redesign, which included outfitting the “workhorse” with a more powerful engine. In 2011, (SWA) placed the 1st order for the 737 MAX, followed by Indonesia’s Lion Air (MLI).
Gary Kelly said (SWA) will get its 1st of its 200 737 MAXs by July. (SWA) plans to put its 1st 737 MAX into service once it retires its 87 remaining 737-300 Classics, its oldest airplanes. And this is the sticking point: (SWA) must retire those old airplanes before it can accommodate new ones, a conundrum that traces back to pilot (FC) training issues. About 10 of (SWA)’s 737 MAX planes will be finished by the time (SWA) is ready to begin flights in October. (SWA) is in talks with Boeing about what to do with those airplanes between July and October, because several are now parked at the periphery of Boeing’s 737 factory in Renton, Washington.
News Item A-9: ACCDT: “Crash: MyCargo 747-412BCF (PW4056) (/03 TC-MCL) at Bishkek on January 16th 2017, Impacted Terrain on Go Around” by Simon Hradecky, Aviation Herald, January 16th 2017. A MyCargo Airlines (ACC) Boeing 747-412BCF freighter airplane, ex-Singapore Airlines (SQH) performing flight TK-6491 from Hong Kong (China) to Bishkek (Kyrgyzstan) with 4 flight crew (FC), was on final approach to Bishkek’s runway 26 at 07:18L/01:18z, when the 747-412BCF went around from very low height but did not climb out to safety, impacted terrain about 1100 meters/3600 feet past the runway end and went through a couple of houses of a village. All 4 (FC) on board the 747-412BCF, as well as 34 people on the ground perished.
Search teams have recovered the flight data recorder (FDR) of the MyCargo Airlines (ACC)’s Boeing 747F that crashed near Manas airport, the Kyrgyzstan government said. Representatives of Russia’s Interstate Aviation Committee arrived at Kyrgyzstan to decipher the information. The Ministry of Emergencies said 300 rescuers worked at the crash site, and 255 representatives of Ministry of Internal Affairs were also involved. The airplane’s flight data recorder and the cockpit voice recorder have been sent to Moscow for analysis, the Kyrgyzstan government said.
News Item A-10: Nigeria’s Arik Air (AKI) has scrapped a longstanding order for 2 Boeing 747-8Is, replacing it with a pair of Boeing 787-9s. The change means a further shrinking of the already slim order book for the 747-8. Most of the new variant 747s ordered to date have been the 787-8F freighter version, as airlines increasingly turn to “big twins” for long-haul passenger services. Boeing (TBC) has reduced the 747-8 production rate to 0.5 airplanes a month as it fulfills remaining orders. Arik Air (AKI)’s order for the 747-8I dates back to 2011. The 2 787-9s are worth $529 million at book value. A regional source, said the 787-9 “makes much better sense” than the 747-8I for Arik Air (AKI), notably on routes to the USA and the UK.
News Item A-11: “Boeing’s (ABS)-2A 702 Satellite Enters Service.” The 2nd 702 satellite built by Boeing (TBC) for Bermuda-based communication satellite operator (ABS) went into service in January.
News Item A-12: The International Association of Machinists & Aerospace Workers (IAM) filed a petition with the National Labor Relations Board (NLRB) on January 20 to hold an election to unionize >2,850 production employees at Boeing (TBC)’s South Carolina facility in North Charleston. It is the 2nd time the (IAM) is seeking an election to represent Boeing’s North Charleston workers. The (IAM) withdrew its 1st unionizing petition with the (NLRB) on April 17, 2015, a week before the scheduled vote. At the time, the (IAM) said the decision was made after union organizers conducted home visits with >1,700 Boeing South Carolina workers, citing a “toxic environment and gross violations of workers’ lawful organizing rights” as the reason it withdrew the petition.
The (IAM) Boeing South Carolina lead organizer Mike Evans said at the time the (IAM) did not believe a free and fair election was possible. With the new petition filed January 20, the (IAM) said organizers have continued to receive reports from Boeing South Carolina workers “regarding numerous workplace concerns that remain unaddressed, including subjective raises, inconsistent scheduling policies and a lack of respect on the shop floor.” “Boeing workers just want to be treated with the respect they deserve,” Evans said. “Why should they be subject to a different set of standards and rules than folks building the exact same plane in Seattle?
Boeing (TBC) said it “firmly believes that a union is not in the best interest of Boeing South Carolina teammates and their families, their communities, and the state of South Carolina, and has consistently held that position for several years.” “Our [Boeing South Carolina] teammates already have a voice, and their ideas, concerns and feedback have driven many changes for the better, and continue to do so today,” Boeing South Carolina VP & General Manager, Joan Robinson-Berry said. “We believe our teammates deserve to keep their hard-earned money in their pockets while continuing to work with the company to drive meaningful change.” The (NLRB) is expected to issue election dates and locations in the coming weeks. “I can unequivocally say there will be a vote this time around,” Evans said. “We’ve met with numerous workers at Boeing (TBC) in recent months and are confident they will see through any attempts by the company to divert attention away from the numerous workplace issues that need fixed.”
Boeing (TBC) builds 787-8s and 787-9s at both its facilities in Everett, Washington and South Carolina. Final assembly of 787-10 airplane, which will be 18 ft/5.5 m longer than the 787-9, is exclusive to Boeing’s North Charleston facility. Final assembly on the 1st 787-10 began in late 2016; its 1st flight is scheduled for this year. 1st delivery is scheduled for 2018 to United Airlines (UAL). (UAL)’s 787-10s will be powered by (GE) Aviation (GEnx-1B) engines. 9 customers have ordered 149 787-10s, according to Boeing.
News Item A-13: “Boeing White-collar Workers’ 2016 Bonus Climbs +20%” by Dominic Gates, Seattle Times Aerospace Reporter, January 28, 2016. Boeing (TBC) will pay out $169.7 million in annual incentive bonuses in annual incentive bonuses to non-executive, white-collar employees in Washington State next month, a sum that’s up +20% from last year. The payments will go to 37,427 eligible non-management employees locally, including members of Boeing’s Engineering union. The total payout to 20,929 members of the Society of Professional Engineering Employees in Aerospace (SPEEA) in Washington State is nearly $89.4 million. Another 16,498 non-union salaried staff in Washington State will get about $80.3 million. The bonuses are based on Boeing (TBC)’s financial results in 2016 when (TBC) made a profit of $4.9 billion.
Company wide, Boeing will pay out $405 million to about 86,000 eligible employees around the world, including 22,000 employees represented represented by (SPEEA) and another 64,000 salaried non-union employees.
Employees will be paid their bonuses on February 23. The payout in the (SPEEA) incentive plan, which is part of the union’s contract, is based on a complex Boeing financial measure (the economic profit of the company, calculated by taking the year’s profits and subtracting an amount related to assets including inventory, buildings and equipment) and on the performance of the business unit the employee works in. As a result, members of different company divisions will receive slightly different percentage payouts. (SPEEA)-represented engineering employees in the Boeing Commercial Airplanes (BCA) division will get 9.9 days of additional pay. Their counterparts in the Defense & Space (D & S) division will get 9.9 days’ worth, and (SPEEA) members in various other corporate units will get 9.7 days of additional pay. This last figure works out to an average of 3.7% of eligible annual pay.
The 64,000 salaried non-union employees will receive their bonuses under a separate performance-based award plans that’s new this year. For them, the bonus is based not only on the overall company’s economic profit and the performance of the unit in which they work, but also on their personal year end performance rating. Accordingly, the non-union bonuses for 2016 will range from just under 3% to just under 7% of the employee’s eligible compensation, Boeing said.
The International Association of Machinists union has its own separate incentive-pay plan, to be announced in a few days.
Boeing management also has its own separate bonus plan, with payout details to be released to managers in the coming days, Boeing said.
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