State has work ahead to keep aerospace jobs December 31, 2012
After a strong 2012, Boeing faces challenging new year December 28, 2012
It's a title that Boeing and analysts alike think the Chicago-based aerospace company will retain for the next few years.
"This is the start of a big run for us," Pat Shanahan, Boeing senior vice president for airplane programs, said during an interview in late December, in anticipation of Thursday's announcement of year-end totals.
With 1,203 net jet orders booked in 2012, Boeing likely beat rival Airbus in both sales and deliveries. Net orders account for cancellations during the year as well as new business. At the end of November, Airbus reported 585 net orders and 516 jet deliveries. The European company is to release final numbers for 2012 on Jan. 17.
Of the 601 jets Boeing delivered in 2012, 46 were 787s built in Everett and North Charleston, S.C. That exceeded the company's Dreamliner delivery goal for the year. Boeing's delivery total will grow in 2013 as the company boosts 787 production from five to 10 jets monthly by year's end.
"It's the Dreamliner finally delivering on the dream," said Yair Reiner, an analyst with Oppenheimer & Co. in New York. "The aircraft that has been the bane of Boeing's existence for so long finished 2012 exceeding Boeing's stated expectations."
Boeing in 2012 also delivered 415 737s from the plant in Renton and 31 747s, 26 767s and 83 777s, all built in Everett. To surpass Airbus, Boeing has gone through six production rate increases in the past 12 months at the various assembly lines.
In a message to employees Thursday, Ray Conner, president of Boeing Commercial Airplanes, noted the company had increased production by 26 percent over the past year, a feat he attributed to employees' "outstanding work."
Boeing workers in Renton, for example, navigated their way through a rate hike from 31.5 jets per month to 35. And they'll increase production again this year to 38.
Yet Shanahan believes the 737 line, like the rest of commercial airplanes, is "healthier operationally than we've ever been."
Boeing also exceeded a previous single-year order record for the 737, with 1,124, thanks largely to requests for the updated 737 MAX, which accounts for 914 of those.
Going into 2012, Boeing planned 70 to 85 deliveries in the 747-8 and 787 programs. It delivered 77. That includes the first 747-8 passenger plane. Boeing jumbo jet deliveries totaled 31 last year.
Boeing has delivered 49 787s to eight customers since late 2011, when the first planes were ready. Of late, though, the Dreamliner has made headlines for mechanical troubles more than for new deliveries or performance. Engine and generator woes, as well as concerns about fuel lines, have created extra maintenance work for airlines and delays for passengers.
"We know we need to investigate those things," Shanahan said. "We've got to improve the reliability."
Shanahan said he remains upbeat about the 787 program, despite initial production difficulties and a rate-increase challenge. The 787 "is going to carry this company for many years to come," he said.
As the company looks ahead in 2013, Boeing has "to step up its game even more," Randy Tinseth, vice president of marketing for commercial airplanes, wrote Thursday on his blog.
Boeing's jet backlog, which increased to 4,373 unfilled requests at the end of 2012, is the highest in history. That means the company will need to "focus on raising production rates and continuously improve how we build airplanes," Conner said.
This year the company will begin building a new Dreamliner, the larger 787-9, with plans to test-fly it by year's end. Meanwhile, Boeing will work closely with customers "to continue defining the 787-10X and 777X," Conner said. Both are aircraft that Boeing has yet to offer to customers.
Boeing shares closed Thursday at $77.47, up 40 cents for the day.
Bloomberg News contributed to this report.
2012 Boeing Commercial Airplanes orders and deliveries
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