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: $500k per plane to fix 787, says FAA; China’s Airbus order

Cost of 787 fix: It will cost nearly $500,000 per aircraft to install the battery fix in the Boeing 787, documents released by the Federal Aviation Administration indicate. The actual math is $466,666. Analysts believe the 787 grounding cost Boeing about $600m, which the CEO said yesterday was absorbed in the R&D budget. Jim McNerney also said there are no contractual obligations to compensate customers for the grounding, but something will likely be worked out.

LOT will resume flying the 787 June 5, it was reported today.

China’s Airbus Order: It appears China is satisfied with the European Union’s about face on carbon taxes. Readers may recall China opposed the EU’s attempt to levy taxes on foreign airlines over carbon emissions. China vowed not to buy any Airbus aircraft–particularly the A330–in retaliation. Several other countries opposed the tax, though these didn’t go so far as to boycott Airbus. Today an $8bn order for Airbuses, including the A330, was announced by China.

Odds and Ends: Boeing helps create new competitor; Home for the 777X; CSeries backlog

Mitsubishi MRJ: The Seattle Times has this profile of the Mitsubishi MRJ and Japan’s emerging role in global aerospace.

What particularly struck us was the narration about the benefits Mitsubishi gained from Boeing in designing and building airplanes. The next point is old news: the MRJ will use a metal wing and fuselage, not composite. Mitsubishi said long ago it would forgo a composite wing, and a metal fuselage was never in the cards for this small aircraft.

We recall that during the 2008  IAM 751 strike, Boeing CEO Jim McNerney sent an email to all employees justifying the need to cut costs because of the new competitors. We wrote at the time, Well no kidding: Boeing is helping create these competitors with its outsourcing. Although the MRJ is currently a 70-90 seat aircraft, a 100-seat version is envisioned. If these are a success, we certainly see the day when Mitsubishi will have ambitions for a 150-seat class of aircraft.

Thanks in no small part to The Boeing Co.

Building the 777X–in Everett? The Puget Sound Business Journal has this story trying to read the tea leaves where Boeing will build the successor to the popular 777-300ER.

Then there is this story from Reuters about the prospective launch of the 777X.

CSeries Backlog: Richard Aboulafia likes the design but otherwise has never had much good to say about the Bombardier CSeries. Take a read of this, Rich. (For those who don’t know, we’re good friends with Aboulafia and have a friendly and public debate over the viability of the CSeries future.)

McNerney on unions and other stuff; where will 777X be built?

Note to Readers wishing to comment: See this article and our Comment #35 and be forewarned.

Boeing CEO Jim McNerney is cited in the Puget Sound Business Journal on labor unions, China and other stuff from his appearance at an aerospace summit.

In the article, McNerney tries to take a moderate stance on unions. But just this week Boeing announced it is moving SPEEA and other union jobs out of Puget Sound, here and here. The moves resulted in a blast from Seattle Times columnist Jon Talton here, and our response here.

Production is booming in Seattle’s Puget Sound, but it’s clear to us that Boeing is engaged in a long-term strategy to build up Charleston as a major, second production plant–not just a 787 production line. We see Charleston-as-to-Seattle as Hamburg-is-to-Toulouse some day. We don’t see Everett shutting down (at least not in our lifetime) because there is too much there. We think Renton is more at risk, once there is a New Small Airplane finally designed to replace the 737–but this is well into the next decade.

The question over where the 777X will be be built is, to us, a little more vexing. Logic says build it here, given the similarities between the baseline 777 and the derivative 777X. This is no different in principal than the 737NG and the 737 MAX–it would have been silly to build it elsewhere.

But McNerney’s comments about labor in the Business Journal notwithstanding, the anti-union sentiment at Boeing Corporate is obvious for all to see.

The future of the 747-8 is in jeopardy. Boeing said as much in its 2012 10K:

Odds and Ends: 787 service return; LionAir’s A320 order; race to Paris; 777X v A350

787 to fly soon: Jim McNerney, CEO of Boeing, says the 787 will be back in service soon. Tests should be completed within days and he is confident in the fix.

LionAir’s A320 order: In case you wondered what LionAir is going to do with all those Airbus A320s now on order, this story tells you. As we suspected, LionAir will follow the AirAsia Group model of setting up airlines throughout Asia. Some will obviously compete with Tony Fernandes’ airline.

The race to Paris: AirInsight won the race by three minutes over Aviation Week. AirInsight posted at 1:24pm EDT and AvWeek at 1:27pm. That might be about the result between Bombardier and Airbus.

777X v A350: Aspire Aviation has an analysis of the forthcoming Boeing 777X and A350-1000 competition.