“One Boeing” is the strategy that blends all the company enterprises–Boeing Commercial, Boeing Defense, Boeing Commercial Aviation Services and other business units into a single set of resources rather than operating as solo businesses.
The P-8A Poseidon program is just such a blend. Using the commercial 737-800 as the platform with the 737-900ER wing, Commercial and Defense integrate the technologies of the two units and assemble the P-8A in what is actually the third 737 production line.
The US Navy has plans to acquire 117 P-8As to replacing the Eisenhower-era Lockheed P-3 Orion. The P-3 and the P-8 has a primary mission of anti-submarine patrol but the airplanes are increasingly being used for maritime patrol in a variety of countries for fisheries, immigration and more recently anti-piracy surveillance.
India ordered eight. Boeing sees a potential market for more than 150 more with countries now flying the P-3.
The Poseidon’s One Boeing approach was copied for the re-bid of the USAF KC-X tanker competition. The original platform, the KC-767 International program, was largely a Boeing Defense effort. The KC-767I, which involved taking a commercial 767-200ER and converting it to a cargo aircraft at Italy’s Alenia and finishing it out at Boeing Wichita, was a disastrous effort. Boeing pulled the work back from Alenia and design and flutter issues caused the program to be several years late to customers Italy and Japan. Only eight were built.
In the re-bid against EADS, BCA and BDS joined forces in an effort patterned after the Poseidon project. Boeing won with a bid that was 10% below EADS. So far, the USAF reports the project is going according to plan.
Boeing is now talking with customers to sell the KC-46A tanker outside the US, which was always part of the plan, according to this Bloomberg article. The platform, called the 767-2C, is about six feet longer than the 767-200ER but shorter than the 767-300ER. Air Force officials were quoted in trade press that commercial cargo versions could be offered, but nothing has been said about this prospect since.
However, we understand that Boeing is nearing a commercial order from FedEx for the -2C that will enable Boeing to boost production of the 767 lines to as much as 2.5 aircraft per month by October 2016.
Boeing is gearing up for the transition from the 737 Next Generation to the 737 MAX at its Renton plant in Washington State.
During pre-Paris Air Show briefings at Boeing last month, embargoed until today, Boeing officials detailed how they will transition the production facility in a continuous flow. When Boeing introduced the 737NG, sales of the 737 Classic were terminated. Boeing expects a two year transition period this time, meaning the NG will continue production 2019, two years after the 737-8 MAX first enters service.
The exception will be the P-8A assembly line, which is based on the 737NG and which is in the so-called “saw tooth” building to the west of the primary 737 assembly plant. The saw tooth building is seen at the far right of this Boeing illustration.
The primary plant above shows the current NG assembly lines to the left and right. The line on the left produces 21 737s a month and the one on the right will be at this rate next year. The line in the center will initially be the MAX transition line, where the test aircraft will be assembled and the workforce learns the differences between assembling the NG and the MAX, which will have substantial differences compared with the NG.
Eventually, the MAX will fully integrate on the two NG lines.
At previous air show briefings, Beverly Wyse VP and GM of 737 Program, said the center line will have the capacity to match the assembly rates of the other two lines, or 21 per month, giving Renton the capacity to produce 63 737s a month.
At last month’s briefing, Wyse displayed this chart that suggests production rates will maintain at 42/mo from implementation next year.
However, we know from our own market intelligence that Boeing is considering sharply higher rates by the end of the decade.
Wyse, in the recent briefing, said the workforce is a key advantage for Boeing with flow-through benefits for Boeing’s customers.
Odds and Ends: Cargolux, Qatar to split; P-8A and MAX; More on Sequestration; Dodging that depth charge
Cargolux, Qatar Airways to split: Several news stories report that Qatar Airways is going to dump its 35% stake in Cargolux. The stories indicate a disagreement in the direction of Cargolux. This story is the most detailed, although it’s now a month old and out-of-date.
The day before the news broke last week, we were told that Qatar wanted to set up a Cargolux hub in Doha and decline more deliveries of Boeing 747-8Fs to Cargolux in favor of using Qatar Airways’ Boeing 777Fs. This tracks similarly with the month-old story linked above. Cargolux has eight 748Fs on order.
There is a general softness in global air cargo traffic that is causing some cargo airlines to consider deferring 748Fs as well, complicating Cargolux’s viability.
We were also told there are sharp personality differences between the Qatar and Cargolux board members that aggravated relations between the two companies.
P-8A and MAX: Bloomberg has this story that looks at an angle about the Boeing 737 MAX that hasn’t been discussed before: Boeing will stick with the NG-based P-8A Poseidon and not shift to the MAX.
Sequestration: We had a recent think piece on how sequestration might not be a bad thing in the long run because it would force the Pentagon to truly re-think its global defense strategy. This piece in Defense News, an authoritative trade publication, picks up a similar theme.
Dodging that depth charge: EADS wanted to merge with BAE Systems. BAE is the prime contractor of the UK’s nuclear submarine fleet. Read this story about the HMS Astute. EADS may well have dodged that bullet–er, depth charge.
Boeing announced today that it will increase the production rate of the 737 to 42 a month from the first half of 2014. This is on top of consecutive rate increases from 31.5 to 35 to 38 a month, which haven’t even been implemented yet. The 38/mo is due to be effective in 2013 and 35/mo next year.
This compares to an announced rate of 42/mo for the Airbus A320, although 737 Program Vice President and General Manager Beverly Wyse said during the Boeing pre-Paris Air Show briefing that because Airbus shuts down production in August for the month, the 42/mo really equals 40/mo. (With the announced rate increase, Boeing lifted the news embargo on Wyse’s presentation; embargoes on other briefings remain until June 19 Paris time.)