747-8 problems
Everett residents may have noticed massive Russian Antonov An-124 cargo planes landing at Paine Field more often than usual this year.
The unique giants have been needed because of a serious run of quality issues with large 747-8 fuselage panels and tail pieces produced at a Triumph Group manufacturing plant in Texas.
Of the 37 Antonov flights into Paine Field tallied by flight-tracking company FlightAware this year, 17 have come in from Dallas-Fort Worth.
The reason was revealed earlier this month in a frank investor teleconference by Triumph Chief Executive Jeffry Frisby .
He told analysts the company’s costs this year at its Grand Prairie, Texas, facility would be $68 million higher than expected because it’s been replacing “a very significant number” of structural 747-8 pieces that failed inspection, then “renting Antonovs to ship (those) parts” to Boeing instead of sending them by rail and truck.
Triumph’s leadership first mentioned quality issues with 747-8 parts in January and brought in new top managers at the plant to turn it around.
Frisby said he’d thought they were “on the road to recovery,” but “sadly, on balance ... it’s really gone the other way at this point.”
The news caught financial analysts off-guard. Triumph’s share price took an 8 percent dive after the news and is since down a total of 12.9 percent to $68.41 .
Boeing suppliers regularly use an Antonov to make last-minute deliveries if something has gone wrong in the supply chain and a part is needed urgently to keep a production line moving.
That’s because you can’t deliver a 777 engine or a 747 fuselage panel on a regular FedEx jet. You need something big — and the An-124 is the largest commercial cargo jet ever mass produced, though only 56 were built.
To load plus-size cargo items, the massive jet can “kneel” on the tarmac. Its nose swings up to reveal a cavernous 21-foot-wide, 14.5-foot-high opening into which a truck can drive.
Boeing spokesman Larry Wilson called the use of Antonovs “just a regular course of business.”
He said Boeing has provided support personnel to Triumph’s Grand Prairie plant — formerly owned by Vought, which was acquired by Triumph in 2010 — and has been closely monitoring the quality of the parts and the delivery schedule.
With the Antonov deliveries, he said, Boeing has maintained its 747-8 production rate of 1.75 jets per month, or 21 per year.
Speaking at a Morgan Stanley conference in California this month, Boeing Chief Executive Jim McNerney said the company expects to maintain that rate through 2014.
Analysts are nevertheless skeptical Boeing will be able to do so. The 747-8 has few orders, with just 53 left to build as of the end of August.
In addition, there are some half dozen 747-8 freighters that are complete but have sat undelivered for months.
The customers deferred these deliveries because of the sharp and sustained downtown in airfreight demand globally, which shows few signs of easing.
There is even an ownerless 747-8 “whitetail” parked forlornly at Paine Field, one of the earliest built, that was dumped by cargo company Atlas Air and hasn’t found a new buyer.
Another white-painted 747-8 being used for flight tests also has no buyer as yet.
A market analysis this month by industry group AirInsight concluded that the four-engine jet market is “moribund, if not dead. ”
At least, in part, because sales will be cannibalized by the forthcoming 407-seat twin-engine 777X, further 747-8 orders “will fall well short” of Boeing’s expectations, AirInsight wrote.
Supply-chain problems are the last thing this jet program needs.