Take a Look at ANA's New Boeing 787-9 Dreamliner, Set to Fly Monday

Tokyo (TheStreet) -- The race is on to be the first airline to operate the first variant of the Boeing (BA) 787 Dreamliner, with two airlines -- ANA and Air New Zealand -- engaged in an intense competition.

ANA took delivery of its first 787-9 on July 27 and plans to operate it Monday, Aug. 4, on a non-revenue charter flight for Japanese and American elementary school students who reside in Japan.

ANA said Thursday that it will first fly the airplane on a revenue flight on Thursday, Aug. 7. The carrier had not previously specified a start date for revenue service, but Air New Zealand had, announcing that it would fly the first commercial 787-9 flight on Saturday, Aug. 9.

ANA was the launch customer for the Dreamliner and is now the world's largest 787 customer, with 28 total 787-8s in service. It has ordered 80 aircraft, including 36 of Boeing's 787-8s and 44 of its 787-9s.

"The 787 Dreamliner is a key element in our growth strategy and we are proud to be the first airline to fly both models of the 787 family," said ANA CEO Osamu Shinobe, in a prepared statement. "[It] will allow us to meet growing demand that is anticipated ahead of the 2020 Tokyo Summer Olympics."

ANA said it will launch scheduled service on Thursday, gradually introducing the planes on routes between Haneda, Osaka and Matsuyama, "as ANA becomes the first airline in the world to operate the scheduled flight of 787-9."

Air New Zealand, launch customer for the 787-9, took its first delivery on July 9. It will operate its first 787-9 revenue flight, from Auckland to Sydney, on Saturday, Aug. 9 -- unless it makes a change in the next several days.

"The 787-9 is schedule to operate between Auckland and Sydney on a surprise and delight basis from 9 August," an Air New Zealand spokeswoman told Australian Business Traveller for its July 25 edition, adding that "all else being equal, this will be the first commercial flight."

Air New Zealand crews will gain 787 experience on the Auckland-Sydney flight. The airline will begin Auckland-Perth 787-9 service on Oct. 15, the publication said.

Boeing said 26 customers have ordered 421 of the 787-9s, accounting for about 40% of all 787-orders. The customers include United (UAL), which will put its first 787-9 into service on the Los Angeles/Melbourne route in October. United has 26 of the 787-9s on order.

Boeing shares closed down 1.48% on Wednesday to $120.48.

The 787-8 seats 242 passengers in Boeing's standard configuration. It has a range of 7,850 miles and is 180 feet long. The 787-9 seats 280 passengers, has a range of 8,300 miles and is 206 feet long. The 787-10 will seat 323 passengers, have a range of 7,020 miles and be 224 feet long.

ANA said that its first 787-9 will have 395 seats, 60 more than an ANA 787-8 configured for domestic use. In April 2015, the carrier will begin international 787-9 service with 215 seats, or 46 more than it uses on 787-8 international flights.

The contest between ANA and Air New Zealand is a sign that the world eagerly awaits the 787-9, a bigger version of the aircraft that, despite several early glitches, is having a big impact on global aviation.

At the high end, the 787 enables United to open new routes like San Francisco-Chengdu that extend the frontiers of world commerce because it is the first mid-sized plane that can carry enough fuel to fly long distances.

At the same time, because of its relatively low operating costs, the 787 also enables Norwegian Air Shuttle to offer global budget flying. While Norwegian has 291 seats on its Boeing 787, United has just 219 seats on its 787s.

Norwegian hasn't been universally embraced for this strategy, though. The labor movement, led by the Air Line Pilots Association, objects to Norwegian's organizational scheme, which involves a Norwegian airline registering aircraft in Ireland and hiring crews in various locations including Thailand as well as the U.S.

Meanwhile Boeing is looking ahead to production of the 787-10. The company said Wednesday that final assembly of the 787-10 will take place in North Charleston, S.C., rather than at its Everett, Wash., factory.

Final assembly of the 787-10 is scheduled to begin in 2017. Since its launch in June 2013, the 787-10 has won 132 orders from six global customers, Boeing said.

Written by Ted Reed in Charlotte, N.C.
To contact this writer, click here

TheStreet Ratings team rates BOEING CO as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:

"We rate BOEING CO (BA) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, compelling growth in net income, increase in stock price during the past year and notable return on equity. We feel these strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • BA's revenue growth has slightly outpaced the industry average of 0.6%. Since the same quarter one year prior, revenues slightly increased by 1.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • BOEING CO reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, BOEING CO increased its bottom line by earning $5.97 versus $5.12 in the prior year. This year, the market expects an improvement in earnings ($8.10 versus $5.97).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Aerospace & Defense industry. The net income increased by 51.9% when compared to the same quarter one year prior, rising from $1,088.00 million to $1,653.00 million.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. When compared to other companies in the Aerospace & Defense industry and the overall market, BOEING CO's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.

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