United returns 787 to service today; WSJ points to other issues

United Airlines is the latest carrier to return the Boeing 787 to service today, on a route from Houston to Chicago. UAL CEO Jeff Smisek is joined by Boeing CEO Jim McNerney on the flight.

Meantime, the Wall Street Journal rained on the parade a bit with an article detailing other issues facing the 787. (Via Google News, but subscription may be required.)

Japan Air Lines, ANA and LAN expect to have the airplane back in service in June, according to reports.

Deliveries of new 787s resumed this month. All this will soon return momentum to Boeing, with formal launch of the 787-10 now anticipated by observes to likely come at the Paris Air Show. Launch will come with orders–widely believed to be from British Airways, Singapore Airlines and Air Lease Corp, and possibly others. If this happens, these will go a long way to restoring the brand damage caused by the ground of nearly 3 1/2 months.

Implications include a boost in the production rate of the 787 to as much as 14 a month. Although this may or may not be announced concurrent with the 787-10 launch, the boost is, in our view, a must. While Boeing expects some 787-9 customers to swap to the 10, reality demands that production increase beyond the 10/mo that will be achieved by the end of this year.

Boeing needs new capacity for the 10 and to open slots for customers who want the 8 and the 9. The line is essentially sold out to 2019-2020 as it is.

EIS for the 10 is planned for 2018, giving the supply chain plenty of time to ramp up.

Fourteen a month–seven in Everett and seven in Charleston–is an unprecedented rate for a wide-body airplane. Airbus is producing the A330 at 10-11 a month and plans to push out the A350 at 10/mo, though at one time there had been talk of a target of 13. The company is already considering a second production line to accommodate demand for the A350-1000. Like the 787, the A350 is essentially sold out to 2019/2020.

Odds and Ends: 777X ATO next month, says AvWeek; 787 and the FAA; A318

777X ATO: Aviation Week reports that Boeing’s Board will grant Authority to Offer the 777X at the next meeting, in April.

Emirates Airlines has previously said it will order 100 or more of the X to begin replacing its 777-300ERs. Lufthansa and Air Lease Corp are likely co-launch customers.

Update: The Wall Street Journal now has an article identifying British Airways and Japan Air Lines as possible launch customers.

787 and the FAA: The FAA is expected to green light this week going forward with Boeing’s proposed fixes for the battery issues in the 787, but this doesn’t mean the challenges are over for Boeing. Extensive lab and flight testing will be required, meaning it still will be some time before the grounding is lifted.

A318 Done: Bloomberg has a story about the Airbus A318 and its dried-up sales. It was never a good seller.

Odds and Ends: Cathay cancels 8 777Fs, takes up 3 747-8Fs; soft cargo market a concern

Cathay cancels 777F order: Cathay Pacific Airways canceled an order for eight Boeing 777Fs. CX will instead acquire three 747-8Fs, trading in four 747-400Fs to Boeing. The cargo market remains soft and Boeing is struggling to sell 747-8Fs. One person close to the program says Boeing is faced with building several white tails this year and a recent aerial photo of Paine Field at Everett did show at least two 747-8Fs with no airline markings on the flight line.

We’re concerned about the continuing soft cargo market–it’s usually a leading indicator about the direction of the passenger market. Boeing forecasts recovery in 2014 but we’re not so sure.

Speaking of 777s, Air Lease Corp picked up an order for 10 777-300ERs.

787 update: Aviation Week has an updated report on the Boeing plans to begin flight tests for the 787. There seems to be a consensus building that the earliest the aircraft might return to revenue service is late April or in May–the latter a day we forecast earlier.

Odds and Ends: Narrowing the cause on 787s; 30-120 days grounding?

Narrowing the Cause: Aviation Week has a good article with some behind-the-scenes snippets about the grounding of the Boeing 787. Toward the end are comments from Japan Air Lines about narrowing the cause of the battery problems.

The JAL comments support what we heard on Friday: that Boeing and investigators are indeed beginning to focus on what they think may be behind the battery incidents. Things are still too fluid and uncertain to provide details here–we don’t want to head people or media off in the wrong direction, even inadvertently–but we’re cautiously optimistic.

Aviation Week also has this story about failure mode testing and the 787 batteries.

Reuters has this story about the progress being made in the investigation.

What this means for grounding: So the continuing question remains, how long will the 787 be on the ground? Boeing wants to get the airplanes in the air this month. A source, citing conversations he’s had with the FAA, says the federal agency sees the 787 grounded a minimum of 30 days and a maximum of 120.

Lithium-ion Batteries OK to Fly: The Detroit News has an interesting story: while the 787 is grounded, lithium-ion batteries are continued to allow to fly in cargo holds.

Air Lease Orders 25 A350s: This is the long-overdue order (it was expected last November). Included are 20 A350-900s and five A350-1000s.

Regional aircraft trending up: Aviation Week reports that regional aircraft sizes are trending up.

CSeries v Airbus, Boeing: Something called the Wiglaf Journal (never heard of it) has an analysis of the Bombardier CSeries vs Airbus and Boeing.

Qatar wants to be first 787-10 customer; praises EU for ‘face-saving’ freeze of ETS

Akbar Al-Baker, the CEO of Qatar Airways, said he wants to be the first customer for the Boeing 787-10. He has some competition for this status.

Boeing is talking with customers now for the new sub-type, which is expected to get the Board go-ahead this month. Air Lease Corp., British Airways and Singapore Airlines have widely been identified as likely launch customers in market talk.

Also at the delivery ceremony for Qatar’s first 787-8, Al-Baker praised the European Union for freezing plans to impose its carbon trading scheme called ETS. He termed the move “face-saving,” noting that several countries ordered their airlines to refuse payment, led by France China.

“This was a very wise decision,” Al-Baker said.