Printed headline: Advanced Aftermarket
The Boeing 787 family’s versatility is changing airline planning strategies. Carriers are using the twin-engine aircraft on a variety of routes, from low-cost transatlantic hops to ultra-long-range connections between global hubs. Airlines also are using the aircraft’s combination of moderate capacity, long range and low seat-mile costs to bypass hubs, as routes to smaller cities such as Austin, Texas, and Nashville, Tennessee, illustrate.
Boeing’s advanced design, including extensive use of composites and more reliance on electrical systems, means changes on the aftermarket side as well. Composites reduce risk of corrosion and fatigue, which significantly reduces the maintenance burden. Leveraging lessons learned from previous designs, Boeing created an airframe made of nearly 50% composites by weight.
The experience gleaned from the Boeing 777 spotlights the durability leap that composites offer. The 777’s composite vertical fin requires about 35% fewer scheduled maintenance hours than the 767’s aluminum fin, despite being 25% larger. This leap is why 787 airframe maintenance costs are projected to be about 45% lower than those of the 767-300ER, Boeing’s calculations show.
This decline comes from both fewer heavy checks and fewer labor hours per hangar visit. The 787’s baseline program calls for a D check every 12 years or 24,000 cycles. Typical labor hours for the D check are estimated at just more than 10,500, meaning a typical 787 is projected to see about 22,000 hr. of heavy-check-related touch labor in a typical lifetime, if a second heavy check, near the end of airframe’s projected useful life, is performed.
The 767-300ER, in contrast, undergoes a heavy check once every six years or 3,000 cycles, which requires about 9,400 labor hours. That translates into about 28,200 hr. of heavy-check labor in three checks over a 24-year period—and that assumes the scheduled check at 24 years is not done.
As 2017 comes to a close, the first 787s are surpassing six years in service, and the number of 36-month-interval C checks is ramping up. Aviation Week’s latest Commercial Fleet and MRO Forecast, which covers 2018-27, projects about 170 C checks in 2018, increasing to nearly 400 in 2020 and 500 by 2023. The annual figure will surpass 600 in 2024 and stay at that level through 2027. The fleet will undergo an average of 425 C checks annually.
Heavy maintenance visits will begin in 2020, the forecast projects, as high-cycle aircraft come due before their 12-years-in-service mark. The first few years will be sporadic, with a total of about 40 heavy checks in 2020-22. The annual count will hit 100 in 2024 and stay in that range through 2026 before jumping to about 225 in 2027, the forecast says.
Once the 787 fleet enters its aftermarket-maturation phase, it will stay there for years to come. Aviation Week’s forecast sees the 787 in-service population growing steadily throughout the next decade, from 600 today to just more than 2,300 by 2028. The 12.4% compound annual growth rate is not expected to waver much year to year, as the forecast sees about 168 787s being added to the fleet annually, based on Boeing’s decision to boost production to 14 aircraft per month in 2019. No retirements are projected during the forecast period.
Boeing’s 787 backlog was 683 aircraft at the beginning of October, and demand for the aircraft has been solid enough to convince the OEM to go ahead with its production increase from 12 to 14 per month. Part of Boeing’s optimism is a cyclical uptick in widebody aircraft ages.
“We still see a significant widebody replacement wave coming in early in the next decades as we have a number of widebodies globally that are going to hit the 25-year point,” Boeing President and CEO Dennis Muilenburg said at a recent industry conference.
The 787 family’s broad appeal is another part of Boeing’s optimism. Operators such as Scoot and Norwegian are using the aircraft in long-haul, low-cost-carrier (LCC) services—a market with upside potential.
“We’re seeing more and more shift on the long-haul LCC market, where airlines are utilizing the 787 in high-density configurations . . . as well as the A330-200s, -300s and the A330-900s,” says Air Lease Corp. Chairman Steven Udvar-Hazy. “Those are all excellent platforms for the long-haul LCC operations.”
Full-service operators are dispatching 787s in myriad ways. Launch customer All Nippon Airways uses them on high-density domestic routes, while United Airlines has deployed 787-9s on recently launched 7,600-nm nonstops between Los Angeles and Singapore.
As the Asia-Pacific markets continue to expand and mature, demand for all missions the 787 flies should grow with them. “Every year in Asia alone, there are 100 million people that fly for the first time,” Muilenburg says. “That tells us there’s long-term growth opportunity there.”
A glance at Boeing’s orderbook suggests the 787-9 will end up being the dominant family member. Of the 1,283 787s ordered through October, 683 were for the -9, including 429 aircraft in the backlog.
At this year’s Paris Air Show, lessor AerCap underscored its preference for the 787-9 by placing a 30-aircraft order for the model.
“This the first widebody order we have placed in the last 10 years,” said AerCap CEO Aengus Kelly. “The 787-9, we believe, is an airplane that will be the workhorse of the small widebody fleets of airlines going forward.”
While both AerCap and the market favor the 787-9, the -10 also has its influential backers, Udvar-Hazy among them. He cites the larger model’s ability to hold about six more rows of seats and carry more cargo—thanks to its 18-ft. fuselage stretch—as a major differentiator over the -9.
From an airframe and component- support perspective, the market is agnostic. The 787-9 and -10 have 95% parts commonality, a major difference from the 787-8 and -9, which only have about 50% commonality.
The 787’s mix of operators, from low-cost upstarts to legacy flag carriers, combined with its advanced technology and related high spare parts costs have created demand for a variety of support options. More than 50% of 787 operators have some type of component support or pooling agreement, Canaccord Genuity analyst Ken Herbert estimates, with Boeing having about a 40% share of those deals. There are other major players, however, including Lufthansa Technik (LHT) and Air France Industries-KLM Engineering & Maintenance.
Agreements are also being struck at the supplier level. Rockwell Collins has landed several deals under its Dispatch asset management program, including one from Air Canada, which carved out its avionics work for Collins and contracted the rest of its 787 component support needs to LHT. Smaller suppliers, such as flight controls provider Moog, have also announced long-term deals to support its products.
The heavy OEM and supplier presence in the 787 aftermarket will not keep alternative suppliers shut out, however. Executives at one large parts manufacturer approval (PMA) supplier report they have been approached by a 787 operator looking for long-term savings.
Supporting new-generation aircraft such as the 787 will require a shift for PMA providers. The OEMs continue to reduce the level of detail provided in maintenance instructions, removing piece-part-level troubleshooting options and instead requiring entire units to be removed and shipped away for repair or replacement. This is forcing PMA providers to tackle projects at the component level—a challenge that they are accepting.
“The more OEMs limit access to instructions for continued airworthiness,” says one PMA supplier executive with eyes on the 787 platform, “the more we generate our own.”