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qf789
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Updated: Boeing to reduce 787 production to 10 aircraft per month in 2021

Fri Jan 24, 2020 5:17 pm

Bloomberg is reporting Boeing is considering another rate cut to the 787. Considering cutting to 10 a month to sluggish demand.

Last year Boeing announced that a temporary rate cut of 14 down to 12 for a couple of years starting next year due to poor sale

https://www.reuters.com/article/us-boei ... SKBN1ZN23M

https://www.bloomberg.com/news/articles ... ce=twitter
Last edited by SQ22 on Wed Jan 29, 2020 4:36 pm, edited 1 time in total.
Reason: Title updated
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MileHFL400
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Re: Boeing considering another 787 production cut

Fri Jan 24, 2020 5:20 pm

8/9 a month would be a good target. The market for wide bodies has softened.

They should now focus on attacking the A330-200/300 replacement market.
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Re: Boeing considering another 787 production cut

Fri Jan 24, 2020 5:47 pm

Have updated opening post, seems a rate of 10 per month is being looked at

https://www.bloomberg.com/news/articles ... ce=twitter
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IADCA
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Re: Boeing considering another 787 production cut

Fri Jan 24, 2020 6:27 pm

MileHFL400 wrote:
8/9 a month would be a good target. The market for wide bodies has softened.

They should now focus on attacking the A330-200/300 replacement market.


Isn't the 787-9 almost the exact same floor area as the A333? I can't imagine them taking another shot at that size when they have other, more pressing priorities.
 
MileHFL400
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Re: Boeing considering another 787 production cut

Fri Jan 24, 2020 6:36 pm

IADCA wrote:
MileHFL400 wrote:
8/9 a month would be a good target. The market for wide bodies has softened.

They should now focus on attacking the A330-200/300 replacement market.


Isn't the 787-9 almost the exact same floor area as the A333? I can't imagine them taking another shot at that size when they have other, more pressing priorities.


Thats what i meant. attack that market with the current 787.
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scbriml
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Re: Boeing considering another 787 production cut

Fri Jan 24, 2020 6:39 pm

MileHFL400 wrote:
IADCA wrote:
MileHFL400 wrote:
8/9 a month would be a good target. The market for wide bodies has softened.

They should now focus on attacking the A330-200/300 replacement market.


Isn't the 787-9 almost the exact same floor area as the A333? I can't imagine them taking another shot at that size when they have other, more pressing priorities.


Thats what i meant. attack that market with the current 787.


What makes you think they're not trying to do this today? You make it sound as though Boeing haven't thought of it.
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dstblj52
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Re: Boeing considering another 787 production cut

Fri Jan 24, 2020 6:49 pm

scbriml wrote:
MileHFL400 wrote:
IADCA wrote:

Isn't the 787-9 almost the exact same floor area as the A333? I can't imagine them taking another shot at that size when they have other, more pressing priorities.


Thats what i meant. attack that market with the current 787.


What makes you think they're not trying to do this today? You make it sound as though Boeing haven't thought of it.

The problem is that everyone is nervous about what is going to happen in the market over the next little bit, and if you think there is going to be a recession an attractively priced A330-300 used or that you already owned is likely the lower risk bet then a newer more fuel-efficient plane. Because if you have to park or reduce the utilization on something it's much better to do so on a cheaper older plane.
 
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Re: Boeing considering another 787 production cut

Fri Jan 24, 2020 7:37 pm

One of the good thing about this is that it should easy the pressure on Rolls Royce allowing them to get a chance to produce more Trent 1000 for all the grounded 787 out there.
 
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Re: Boeing considering another 787 production cut

Fri Jan 24, 2020 8:25 pm

With, according to wikipedia, 546 undelivered, why do they feel the need to cut deliveries? Are there many orders on the brink of collapse? I mean 550 orders are about 4 years of production, without new orders that is.
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Re: Boeing considering another 787 production cut

Fri Jan 24, 2020 8:37 pm

Dutchy wrote:
With, according to wikipedia, 546 undelivered, why do they feel the need to cut deliveries? Are there many orders on the brink of collapse? I mean 550 orders are about 4 years of production, without new orders that is.


On average, if one looks at historic data, Boeing sells around 90 787s each year. That means the backlog is coming down thus rate 14 or 12 is not sustainable in the long term.

Assuming ~ 300 deliveries in 2021 (160 @rate 14) and 2022 (140 @ rate 12), and 180 new orders (2x 90) during that same period, the backlog would stand at ~ 430 aircraft in 2023. Taking lead times of some parts up to 18 months into account, the rate will have to come down.
Last edited by PepeTheFrog on Fri Jan 24, 2020 8:42 pm, edited 2 times in total.
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Re: Boeing considering another 787 production cut

Fri Jan 24, 2020 8:37 pm

Dutchy wrote:
I mean 550 orders are about 4 years of production, without new orders that is.


The production line "time length" is no less than 18 months. That means some elements start producing 18 months ahead of final assembly. And you have to dispose all the investments you did to achieve 14 per month - in all companies. They have to have time for plan on that.

I think Boeing's quite reasonable to do that now. Airbus is now having 5 years, they have a bit longer, but seems 350 will also need to have production reduced, unless there are some new orders within this year.

Cheers,
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Re: Boeing considering another 787 production cut

Fri Jan 24, 2020 8:48 pm

Dutchy wrote:
With, according to wikipedia, 546 undelivered, why do they feel the need to cut deliveries? Are there many orders on the brink of collapse? I mean 550 orders are about 4 years of production, without new orders that is.


the desired delivery timeline from customers covers much more than those 4 years.
i.e. Boeing may have sufficient demand 2020, 21, but after that untaken slots appear.
Seem to recall seeing a nice graphic but can't find it on short notice.

This is from 2017: https://leehamnews.com/wp-content/uploa ... 87-GAP.png
via https://leehamnews.com/2017/01/30/no-ra ... oeing-787/

so just add in the per year 787 orders from Jan 2017 to today.
proportional per year added ( shifted by 1,2 and 3 years to retrace previous customer demand curve)
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scbriml
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Re: Boeing considering another 787 production cut

Fri Jan 24, 2020 10:39 pm

Dutchy wrote:
With, according to wikipedia, 546 undelivered, why do they feel the need to cut deliveries? Are there many orders on the brink of collapse? I mean 550 orders are about 4 years of production, without new orders that is.


The issue isn’t the size of the backlog, but when the airlines want deliveries of those planes. Lehman has had several articles about the 787 delivery skyline.
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musman9853
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Re: Boeing considering another 787 production cut

Fri Jan 24, 2020 11:34 pm

The wild card is if the China deal results in new orders. If they do, would they still cut the rate to extend the program life?
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reidar76
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Re: Boeing considering another 787 production cut

Fri Jan 24, 2020 11:35 pm

Dutchy wrote:
With, according to wikipedia, 546 undelivered, why do they feel the need to cut deliveries? Are there many orders on the brink of collapse? I mean 550 orders are about 4 years of production, without new orders that is.


According to Boeing (https://www.boeing.com/commercial/#/orders-deliveries), the 787 backlog stand at 520 aircraft (December 2019). With current production rate (14/month) that is three years of production. Of course, the airlines doesn't want aircraft delivered that soon.

Boeing needs to reduce production to a sustainable level. That may well mean a gradual reduction to maybe (+/-) 6/month. Remember at the A330 has outsold the 787 the last decade, but the 787 is currently being produced at more than twice the rate.

Looking at average net orders for the 787 the last decade, the orders can sustain rate 6.8/month. With the softening of the widebody market and increased competition from the A330neo, the 787 production will probably come down to 6/month in a few years.

Image
 
MCTSET
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Re: Boeing considering another 787 production cut

Sat Jan 25, 2020 12:29 am

Boeing thought they were slick announcing this on the supposed 777x first flight day, hoping the stock would be defended by the test flight.
 
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Re: Boeing considering another 787 production cut

Sat Jan 25, 2020 2:43 am

reidar76 wrote:
Dutchy wrote:
With, according to wikipedia, 546 undelivered, why do they feel the need to cut deliveries? Are there many orders on the brink of collapse? I mean 550 orders are about 4 years of production, without new orders that is.


According to Boeing (https://www.boeing.com/commercial/#/orders-deliveries), the 787 backlog stand at 520 aircraft (December 2019). With current production rate (14/month) that is three years of production. Of course, the airlines doesn't want aircraft delivered that soon.

Boeing needs to reduce production to a sustainable level. That may well mean a gradual reduction to maybe (+/-) 6/month. Remember at the A330 has outsold the 787 the last decade, but the 787 is currently being produced at more than twice the rate.

Looking at average net orders for the 787 the last decade, the orders can sustain rate 6.8/month. With the softening of the widebody market and increased competition from the A330neo, the 787 production will probably come down to 6/month in a few years.

Image


I made it that 520 divided by the 158 delivered last year is 3.3 years, which is starting to look short compared to the other widebodys.

You mention the "softening" widebody market, as well as the A330NEO.
Both are potential factors.
If you plot widebody deliveries in the A330/787/A350/777 space (so that excludes the 747/A380 and 767 freighters), there has been an explosion in deliveries in the last 6-7 years
Here are the numbers for the last 20 years..

2000 - 98
2001 - 96
2002 - 89
2003 - 70
2004 - 83
2005 - 96

2006 - 127
2007 - 151
2008 - 133
2009 - 164
2010 - 161
2011 - 163

2012 - 230
2013 - 271

2014 - 322
2015 - 350
2016 - 351
2017 - 355
2018 - 335
2019 - 368

The breaks show the growth in "hundreds" (i.e numbers in the 100's, numbers in the 200's etc)
The last 6 years in particular have been phenomenal, with the A330, 777, and 787 all getting into triple figures or very damn close to it (4 successive years of 98/99 deliveries for the 777)

Out of the 4,000 deliveries in the last 20 years, 2,000 of them have been in the last 6 years.
That means that a) current airline stock is very young, and b) the current rate is above the long-term sustainable trend.

The 787 has the shortest "production cover" of any of these 4 widebodys (backlog divided by last years deliveries)
The numbers are:- (backlog/2019 deliveries)

A330 - 331/53 = 6.2
A350 - 579/112 = 5.2
777 - 377/45 = 8.4 (influenced by the transition to 777X of course)
787 - 520/158 = 3.3

Over the next couple of years I expect the A330 to rise, and A350 and 777 to remain about flat.
Given the need for an overall output reduction, that makes 787 rate cuts look inevitable.
I don't think it's a long-term issue - more of a "trend correction".
Boeing have made hay with the 787 whilst the sun has shone and delivered a LOT of 787's - unparalleled in the history of widebody production

Rgds
 
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Re: Boeing considering another 787 production cut

Sat Jan 25, 2020 3:29 am

MCTSET wrote:
Boeing thought they were slick announcing this on the supposed 777x first flight day, hoping the stock would be defended by the test flight.


What did they announce today?
 
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Re: Boeing considering another 787 production cut

Sat Jan 25, 2020 9:50 am

MCTSET wrote:
Boeing thought they were slick announcing this on the supposed 777x first flight day, hoping the stock would be defended by the test flight.


Where have we seen that before? Right, rumors of 787 sales to Air Berlin 2 days ahead of the NTSB battery report.
Worked like charm.

yesterday there is a $+10 ramp beginning at 2.30 pm EST ( 11:30 am Seattle time? ) ending 2:55 then constant with noise.
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Re: Boeing considering another 787 production cut

Sat Jan 25, 2020 11:22 am

astuteman wrote:
reidar76 wrote:
Dutchy wrote:
With, according to wikipedia, 546 undelivered, why do they feel the need to cut deliveries? Are there many orders on the brink of collapse? I mean 550 orders are about 4 years of production, without new orders that is.


According to Boeing (https://www.boeing.com/commercial/#/orders-deliveries), the 787 backlog stand at 520 aircraft (December 2019). With current production rate (14/month) that is three years of production. Of course, the airlines doesn't want aircraft delivered that soon.

Boeing needs to reduce production to a sustainable level. That may well mean a gradual reduction to maybe (+/-) 6/month. Remember at the A330 has outsold the 787 the last decade, but the 787 is currently being produced at more than twice the rate.

Looking at average net orders for the 787 the last decade, the orders can sustain rate 6.8/month. With the softening of the widebody market and increased competition from the A330neo, the 787 production will probably come down to 6/month in a few years.

Image


I made it that 520 divided by the 158 delivered last year is 3.3 years, which is starting to look short compared to the other widebodys.

You mention the "softening" widebody market, as well as the A330NEO.
Both are potential factors.
If you plot widebody deliveries in the A330/787/A350/777 space (so that excludes the 747/A380 and 767 freighters), there has been an explosion in deliveries in the last 6-7 years
Here are the numbers for the last 20 years..

2000 - 98
2001 - 96
2002 - 89
2003 - 70
2004 - 83
2005 - 96

2006 - 127
2007 - 151
2008 - 133
2009 - 164
2010 - 161
2011 - 163

2012 - 230
2013 - 271

2014 - 322
2015 - 350
2016 - 351
2017 - 355
2018 - 335
2019 - 368

The breaks show the growth in "hundreds" (i.e numbers in the 100's, numbers in the 200's etc)
The last 6 years in particular have been phenomenal, with the A330, 777, and 787 all getting into triple figures or very damn close to it (4 successive years of 98/99 deliveries for the 777)

Out of the 4,000 deliveries in the last 20 years, 2,000 of them have been in the last 6 years.
That means that a) current airline stock is very young, and b) the current rate is above the long-term sustainable trend.

The 787 has the shortest "production cover" of any of these 4 widebodys (backlog divided by last years deliveries)
The numbers are:- (backlog/2019 deliveries)

A330 - 331/53 = 6.2
A350 - 579/112 = 5.2
777 - 377/45 = 8.4 (influenced by the transition to 777X of course)
787 - 520/158 = 3.3

Over the next couple of years I expect the A330 to rise, and A350 and 777 to remain about flat.
Given the need for an overall output reduction, that makes 787 rate cuts look inevitable.
I don't think it's a long-term issue - more of a "trend correction".
Boeing have made hay with the 787 whilst the sun has shone and delivered a LOT of 787's - unparalleled in the history of widebody production

Rgds


Thank you for an interesting post. A300, A340 and pax 767s were delivered in the first of the two decades. If you had included those, and excluded the large number 777F in the last decade, the number wouldn't be so extreme. The clear increase in widebody pax deliveries would still be there.

Possible 787 production rate:
2020: 14/month (current)
2021: 12/month (previously announced)
2022: 10/month (reported now)
2023: 8/month (highly likely)
2024: 6/month (sustainable level?)
 
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Re: Boeing considering another 787 production cut

Sat Jan 25, 2020 11:48 am

reidar76 wrote:
Possible 787 production rate:
2020: 14/month (current)
2021: 12/month (previously announced)
2022: 10/month (reported now)
2023: 8/month (highly likely)
2024: 6/month (sustainable level?)

You've got to be joking?

The 787 is averaging 90 orders a year and it needs 7.5 aircraft per month just to maintain the current backlog of 540 aircraft.

At a production rate of 10 per month that means the backlog will be reducing by only 2.5 aircraft per month or 30 per year. With a backlog of 540 orders that would take 18 years until production ends.

10 aircraft per month is extremely low. Demand would have to reduce significantly and orders to replace the original 787-8's will be coming very soon.

The only potential reason for such a low rate would be that the 797 widebody launch is imminent. The majority of the 787-8 aircraft might get replaced by the 797. The 797 will capture a huge portion of the market currently dominated by the A321 and A330CEO. The A321 is the largest narrowbody and the A330CEO is used as a short/medium haul widebody by the majority of airlines. Sacrificing two 787 per month for a gain of 12+ 797's will capture huge market share for Boeing.
 
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scbriml
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Re: Boeing considering another 787 production cut

Sat Jan 25, 2020 12:04 pm

RJMAZ wrote:
The 787 is averaging 90 orders a year and it needs 7.5 aircraft per month just to maintain the current backlog of 540 aircraft.

At a production rate of 10 per month that means the backlog will be reducing by only 2.5 aircraft per month or 30 per year. With a backlog of 540 orders that would take 18 years until production ends.

10 aircraft per month is extremely low. Demand would have to reduce significantly and orders to replace the original 787-8's will be coming very soon.


As has been explained before, it's not the size of the backlog that's the issue, it's when the airlines want those deliveries. There aren't enough airlines wanting delivery in the next few years to justify rate 12, hence the talk of going down to 10.

IIRC, you were one who was adamant that Boeing didn't need to reduce below rate 14 "because of the backlog". The above was explained (and reported multiple times by Leeham) and shortly after, Boeing reduced to rate 12, now they're apparently considering rate 10. Since 2013 there hasn't been a year where Boeing booked more 787 orders than deliveries. You can't maintain a high production rate in those circumstances. Boeing isn't stupid, they wouldn't cut production if they didn't need to.

And yes, Airbus is likely to see the same issue with the A350.
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scbriml
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Re: Boeing considering another 787 production cut

Sat Jan 25, 2020 12:12 pm

RJMAZ wrote:
The only potential reason for such a low rate would be that the 797 widebody launch is imminent.


Yet Calhoun has just told us the exact opposite. They're starting over on NMA. :scratchchin:

RJMAZ wrote:
Sacrificing two 787 per month for a gain of 12+ 797's will capture huge market share for Boeing.


Overly optimistic IMHO.
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WIederling
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Re: Boeing considering another 787 production cut

Sat Jan 25, 2020 12:22 pm

astuteman wrote:
Boeing have made hay with the 787 whilst the sun has shone and delivered a LOT of 787's - unparalleled in the history of widebody production


Short term bookkeeping cosmetics. In a way, feeding market expectations to float share value.
Going to 14 can't have been cheap to achieve but that is less visible via program accounting.
( and they effectively delivered 13.2 / m in 2019 )
So the current plan is to continue one further year at nominally 14 ( 2years altogether )
and then reduce output in steps by ~30% overall. After that the path projection is open.

IMU the hay was plastic surrogate for show purposes :-)))
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Re: Boeing considering another 787 production cut

Sat Jan 25, 2020 12:26 pm

WIederling wrote:
Short term bookkeeping cosmetics. In a way, feeding market expectations to float share value.
Going to 14 can't have been cheap to achieve but that is less visible via program accounting.

If anything program accounting has made 787 costs more visible, as we can track rough “profit per plane” based on how much they have paid down their deferred program costs each quarter which is only coming from 787 deliveries.

It’s not like other accounting methods directly tell us how much production rate changes cost. That gets buried.
Last edited by Polot on Sat Jan 25, 2020 12:35 pm, edited 1 time in total.
 
WIederling
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Re: Boeing considering another 787 production cut

Sat Jan 25, 2020 12:34 pm

RJMAZ wrote:
Sacrificing two 787 per month for a gain of 12+ 797's will capture huge market share for Boeing.


What kind of sacrifice is it when you reduce one types rate a year in the future by 2 and shortly after another 2
when that other type won't see industrialization and production before another 5..7 years have passed?
( what did Boeing tell when they announced "to keep high production numbers for 777* line?
first they corrected to 777X slots count double for effort, then "fire blanks"
and finally adjusting the rate to 45/a i.e. <4/m, down from 8,2/m )

To wit:
There is no connection. 787 production reduction is only dependent on itself ( more precise: backlog and future sales expectations ).
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SteelChair
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Re: Boeing considering another 787 production cut

Sat Jan 25, 2020 12:37 pm

RJMAZ wrote:
reidar76 wrote:
Possible 787 production rate:
2020: 14/month (current)
2021: 12/month (previously announced)
2022: 10/month (reported now)
2023: 8/month (highly likely)
2024: 6/month (sustainable level?)

You've got to be joking?

The 787 is averaging 90 orders a year and it needs 7.5 aircraft per month just to maintain the current backlog of 540 aircraft.

At a production rate of 10 per month that means the backlog will be reducing by only 2.5 aircraft per month or 30 per year. With a backlog of 540 orders that would take 18 years until production ends.

10 aircraft per month is extremely low. Demand would have to reduce significantly and orders to replace the original 787-8's will be coming very soon.

The only potential reason for such a low rate would be that the 797 widebody launch is imminent. The majority of the 787-8 aircraft might get replaced by the 797. The 797 will capture a huge portion of the market currently dominated by the A321 and A330CEO. The A321 is the largest narrowbody and the A330CEO is used as a short/medium haul widebody by the majority of airlines. Sacrificing two 787 per month for a gain of 12+ 797's will capture huge market share for Boeing.


You assume the 540 are firm. Many of those orders are soft imho....subject to delay or cancellation.

There is no 797.

International air travel demand is weak right now, many carriers are struggling and the 787 is over built and too heavy for 80-90% of the routes.
 
RickNRoll
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Re: Boeing considering another 787 production cut

Sat Jan 25, 2020 12:38 pm

musman9853 wrote:
The wild card is if the China deal results in new orders. If they do, would they still cut the rate to extend the program life?
The China "deal" won't make China order more planes then they need.
 
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HALtheAI
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Re: Boeing considering another 787 production cut

Sat Jan 25, 2020 12:52 pm

SteelChair wrote:
You assume the 540 are firm. Many of those orders are soft imho....subject to delay or cancellation.


I went through the 787 order backlog using Boeing's website, and these are the ones that looked the most dubious to me.

Arik Air (Nigeria)
787-9   30-Mar-2007   9 remaining of 9

Avianca (Colombia)
787-9   28-Sep-2012   2 remaining of 3

Business Jet/VIP Customer(s) (USA)
787-8   20-Dec-2007   1 remaining of 1

Etihad Airways (United Arab Emirates)
787-9   10-Mar-2008   11 remaining of 41
787-10  14-Nov-2013   23 remaining of 30

Jet Airways (India)
787-9   29-Dec-2006   10 remaining of 10

Norwegian Air Shuttle (Norway)
787-9   21-Oct-2015   5 remaining of 13

Republic of Iraq (Iraq)
787-8   22-Dec-2009   10 remaining of 10

Royal Jordanian (Jordan)
787-8   30-Mar-2007   3 remaining of 6

Unidentified Customer(s) (Unidentified)
787-9   31-Mar-2006   9 remaining of 9
787-10  05-Dec-2008   8 remaining of 8
 
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Re: Boeing considering another 787 production cut

Sat Jan 25, 2020 1:21 pm

HALtheAI wrote:
SteelChair wrote:
You assume the 540 are firm. Many of those orders are soft imho....subject to delay or cancellation.


I went through the 787 order backlog using Boeing's website, and these are the ones that looked the most dubious to me.

Arik Air (Nigeria)
787-9   30-Mar-2007   9 remaining of 9

Avianca (Colombia)
787-9   28-Sep-2012   2 remaining of 3

Business Jet/VIP Customer(s) (USA)
787-8   20-Dec-2007   1 remaining of 1

Etihad Airways (United Arab Emirates)
787-9   10-Mar-2008   11 remaining of 41
787-10  14-Nov-2013   23 remaining of 30

Jet Airways (India)
787-9   29-Dec-2006   10 remaining of 10

Norwegian Air Shuttle (Norway)
787-9   21-Oct-2015   5 remaining of 13

Republic of Iraq (Iraq)
787-8   22-Dec-2009   10 remaining of 10

Royal Jordanian (Jordan)
787-8   30-Mar-2007   3 remaining of 6

Unidentified Customer(s) (Unidentified)
787-9   31-Mar-2006   9 remaining of 9
787-10  05-Dec-2008   8 remaining of 8


The Norwegian frames 4 of those will be delivered in the next 3 months, 2 have already are on the flightline, the third is the next one to enter FAL and the fourth to enter FAL within the next month

Etihad has just taken delivery of its 8th 787-10, with the next one to be delivered in the 3Q

The ones for Avianca has just been delayed indefinitely
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reidar76
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Re: Boeing considering another 787 production cut

Sat Jan 25, 2020 2:40 pm

reidar76 wrote:
Possible 787 production rate:
2020: 14/month (current)
2021: 12/month (previously announced)
2022: 10/month (reported now)
2023: 8/month (highly likely)
2024: 6/month (sustainable level?)


RJMAZ wrote:
You've got to be joking?


No. Widebody deliveries are now at an unprecedented high level. The 787 is burning thru the backlog at a high rate. It will have to come down, even below rate 10 that is just been reported. Rate 6 seems sustainable.

RJMAZ wrote:
The 787 is averaging 90 orders a year and it needs 7.5 aircraft per month just to maintain the current backlog of 540 aircraft.


According to Boeing's official numbers at their website, the 787 backlog per December 2019 is 520 aircraft. The average net orders (cancellation in year of order) for last 10 years, is 83.7 aircraft, according the official numbers on Boeing's website.

RJMAZ wrote:
At a production rate of 10 per month that means the backlog will be reducing by only 2.5 aircraft per month or 30 per year. With a backlog of 540 orders that would take 18 years until production ends.


No. For 2020 we will be at rate 14, in 2021 at the previously announced rate 12, in 2022 at the now reported rate 10. When we reach rate 10 in 2022, Boeing will have burnt thru a large part of the backlog, so your 18 years doesn't make any sense.

RJMAZ wrote:
10 aircraft per month is extremely low.


I disagree. The 787 is the only widebody family that have ever been above rate 10.

RJMAZ wrote:
The only potential reason for such a low rate would be that the 797 widebody launch is imminent.


The new Boeing CEO just cancelled the NMA. David Calhoun says on 22 January in response to questions about the NMA. “We are going to start with a clean sheet of paper, again.” “We are going to take, probably, a different approach,” ... "due to changes in the global aviation market and heightened focus on pilot-aircraft interactions." (quotes as reported by FlightGlobal)
 
mjoelnir
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Re: Boeing considering another 787 production cut

Sat Jan 25, 2020 4:10 pm

It is not long ago I talked about further rate cuts would be needed for the 787. Some posters provided wild protests. The 787 has not reached rate 14 this year and will not reach it this year.
I assume we will see the rate reduction to 12 during this year. Rate reduction to 10 during next year.
How low the rate will go, perhaps even down to 8, depends how fast Boeing will reduce the rate. The MAX debacle will put pressure on Boeing to keep the rate up to keep the cash flow up.
I assume production will stabilize at about rate 10, but only if we see the Chinese orders.
 
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par13del
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Re: Boeing considering another 787 production cut

Sat Jan 25, 2020 4:27 pm

reidar76 wrote:
The new Boeing CEO just cancelled the NMA. David Calhoun says on 22 January in response to questions about the NMA. “We are going to start with a clean sheet of paper, again.” “We are going to take, probably, a different approach,” ... "due to changes in the global aviation market and heightened focus on pilot-aircraft interactions." (quotes as reported by FlightGlobal)

One does have to wonder what changes took place in the global aviation market between the day his predecessor was fired and he was hired.....unless under his watch they will be able to flesh out a new design, plan out the necessary production details and give that to the board for approval in six months before the global aviation market changes. No longer will it take 2 to 3 years the get a new a/c to offer.
 
musman9853
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Re: Boeing considering another 787 production cut

Sat Jan 25, 2020 4:40 pm

RickNRoll wrote:
musman9853 wrote:
The wild card is if the China deal results in new orders. If they do, would they still cut the rate to extend the program life?
The China "deal" won't make China order more planes then they need.

Sure but the rate 14 increase was done partly in anticipation of future Chinese orders that never materialized. And China still needs a lot of planes
Welcome to the City Beautiful.
 
ewt340
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Re: Boeing considering another 787 production cut

Sat Jan 25, 2020 4:56 pm

Their biggest problem gonna be A330-900neo. Just like the previous version of A330 or some other airbus model like A321. The Neo is a late bloomer, deliveries started to picked up at least 10 years after the launch of the ceo model.

Boeing need to follow Airbus footstep to keep working on minor changes for B787 if they want the program to survive. New generation of engines wouldn't be here until at least 2025. They can't just banking on these alone for B787 survival.
 
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Polot
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Re: Boeing considering another 787 production cut

Sat Jan 25, 2020 5:11 pm

mjoelnir wrote:
It is not long ago I talked about further rate cuts would be needed for the 787. Some posters provided wild protests. The 787 has not reached rate 14 this year and will not reach it this year.

787 is at rate 14 right now.
 
mjoelnir
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Re: Boeing considering another 787 production cut

Sat Jan 25, 2020 5:36 pm

Polot wrote:
mjoelnir wrote:
It is not long ago I talked about further rate cuts would be needed for the 787. Some posters provided wild protests. The 787 has not reached rate 14 this year and will not reach it this year.

787 is at rate 14 right now.


Could you show me those numbers? When did the 787 production reach rate 14?

I can calculate. Rate 14 would mean 168 frames a year. 158 frames was last years deliveries, including the year end rush of 21 frames, that would be rate 13.17 to be exact.
Looking at the nice 787 spreadsheet, loading was at 13.33, roll out at 13.5 and deliveries at 13.17

Shall we make a bet about this years deliveries?
 
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scbriml
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Re: Boeing considering another 787 production cut

Sat Jan 25, 2020 5:44 pm

mjoelnir wrote:
Polot wrote:
mjoelnir wrote:
It is not long ago I talked about further rate cuts would be needed for the 787. Some posters provided wild protests. The 787 has not reached rate 14 this year and will not reach it this year.

787 is at rate 14 right now.


Could you show me those numbers? When did the 787 production reach rate 14?

I can calculate. Rate 14 would mean 168 frames a year. 158 frames was last years deliveries, including the year end rush of 21 frames, that would be rate 13.17 to be exact.
Looking at the nice 787 spreadsheet, loading was at 13.33, roll out at 13.5 and deliveries at 13.17

Shall we make a bet about this years deliveries?


I think rate 14 didn’t run from 1st Jan, so 12 x 14 weren’t built, but current rate is 14.
Time flies like an arrow. Fruit flies like a banana!
There are 10 types of people in the World - those that understand binary and those that don't.
 
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Polot
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Re: Boeing considering another 787 production cut

Sat Jan 25, 2020 5:46 pm

mjoelnir wrote:
Polot wrote:
mjoelnir wrote:
It is not long ago I talked about further rate cuts would be needed for the 787. Some posters provided wild protests. The 787 has not reached rate 14 this year and will not reach it this year.

787 is at rate 14 right now.


Could you show me those numbers? When did the 787 production reach rate 14?

I can calculate. Rate 14 would mean 168 frames a year. 158 frames was last years deliveries, including the year end rush of 21 frames, that would be rate 13.17 to be exact.
Looking at the nice 787 spreadsheet, loading was at 13.33, roll out at 13.5 and deliveries at 13.17

Shall we make a bet about this years deliveries?

You are confusing deliveries and production rate. While the two are linked they are not the same thing. Boeing was never planning on delivering 168 787s last year. Why? Because the 787 only reached 14/ month in the second quarter of the year (https://www.reuters.com/article/us-boei ... SKCN1PO249). You’re a smart man- how do you get 168 deliveries if you only start building 14/month ~3 months into the year?

Deliveries also ignore planes built but not yet delivered. Boeing has several of those thanks to the HNA group. Some are still not delivered (the ones painted in Vistara livery) or were only delivered this month (one of Bamboo’s).

That year end rush of 21 planes included a whooping 7 QR 789s delivered from 12/26 to 12/28. Do you think Boeing built all those planes in December?
 
WIederling
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Re: Boeing considering another 787 production cut

Sat Jan 25, 2020 5:52 pm

Polot wrote:
mjoelnir wrote:
that would be rate 13.17 to be exact.
Looking at the nice 787 spreadsheet, loading was at 13.33, roll out at 13.5 and deliveries at 13.17

............................
That year end rush of 21 planes included a whooping 7 QR 789s delivered from 12/26 to 12/28. Do you think Boeing built all those planes in December?


Hammer "mjoelnir" offered the FAL load rates. maybe we can work from there?
Murphy is an optimist
 
mjoelnir
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Re: Boeing considering another 787 production cut

Sat Jan 25, 2020 6:08 pm

Polot wrote:
mjoelnir wrote:
Polot wrote:
787 is at rate 14 right now.


Could you show me those numbers? When did the 787 production reach rate 14?

I can calculate. Rate 14 would mean 168 frames a year. 158 frames was last years deliveries, including the year end rush of 21 frames, that would be rate 13.17 to be exact.
Looking at the nice 787 spreadsheet, loading was at 13.33, roll out at 13.5 and deliveries at 13.17

Shall we make a bet about this years deliveries?

You are confusing deliveries and production rate. While the two are linked they are not the same thing. Boeing was never planning on delivering 168 787s last year. Why? Because the 787 only reached 14/ month in the second quarter of the year (https://www.reuters.com/article/us-boei ... SKCN1PO249). You’re a smart man- how do you get 168 deliveries if you only start building 14/month ~3 months into the year?

Deliveries also ignore planes built but not yet delivered. Boeing has several of those thanks to the HNA group. Some are still not delivered (the ones painted in Vistara livery) or were only delivered this month (one of Bamboo’s).

That year end rush of 21 planes included a whooping 7 QR 789s delivered from 12/26 to 12/28. Do you think Boeing built all those planes in December?


I am not confusing any thing. I gave you the three numbers, loading, roll out and deliveries. Non reached rate 14 through the year. No starting slow and increasing the rate during the year. Otherwise you have to talk about 11.5 Month or we see the start of the draw down.

If you look at spreadsheet from ALL THINGS 787
Take the loading numbers they should be the most exact of the numbers providing the rate.
January 14, starting at rate 14
February 12, 2 frames down
March 15, 1 up
April 14
May 14
June 14
July 13, 1 down
August 15, 1 up
September 13, 1 down
October 15, 1 up
November 12, 2 down
December 9, 5 down
Average loading rate 13.33

I have to say rate 14 applied for the beginning of the year, but not in the end.
 
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Polot
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Re: Boeing considering another 787 production cut

Sat Jan 25, 2020 6:11 pm

mjoelnir wrote:
Polot wrote:
mjoelnir wrote:

Could you show me those numbers? When did the 787 production reach rate 14?

I can calculate. Rate 14 would mean 168 frames a year. 158 frames was last years deliveries, including the year end rush of 21 frames, that would be rate 13.17 to be exact.
Looking at the nice 787 spreadsheet, loading was at 13.33, roll out at 13.5 and deliveries at 13.17

Shall we make a bet about this years deliveries?

You are confusing deliveries and production rate. While the two are linked they are not the same thing. Boeing was never planning on delivering 168 787s last year. Why? Because the 787 only reached 14/ month in the second quarter of the year (https://www.reuters.com/article/us-boei ... SKCN1PO249). You’re a smart man- how do you get 168 deliveries if you only start building 14/month ~3 months into the year?

Deliveries also ignore planes built but not yet delivered. Boeing has several of those thanks to the HNA group. Some are still not delivered (the ones painted in Vistara livery) or were only delivered this month (one of Bamboo’s).

That year end rush of 21 planes included a whooping 7 QR 789s delivered from 12/26 to 12/28. Do you think Boeing built all those planes in December?


I am not confusing any thing. I gave you the three numbers, loading, roll out and deliveries. Non reached rate 14 through the year. No starting slow and increasing the rate during the year. Otherwise you have to talk about 11.5 Month or we see the start of the draw down.

If you look at spreadsheet from ALL THINGS 787
Take the loading numbers they should be the most exact of the numbers providing the rate.
January 14, starting at rate 14
February 12, 2 frames down
March 15, 1 up
April 14
May 14
June 14
July 13, 1 down
August 15, 1 up
September 13, 1 down
October 15, 1 up
November 12, 2 down
December 9, 5 down
Average loading rate 13.33

I have to say rate 14 applied for the beginning of the year, but not in the end.


Year end is skewed as Boeing shuts down for holidays (a couple of days for Thanksgiving and about a week for Christmas/New Years). You are taking the 14/month far too literally.
 
mjoelnir
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Re: Boeing considering another 787 production cut

Sat Jan 25, 2020 6:49 pm

Polot wrote:
mjoelnir wrote:
Polot wrote:
You are confusing deliveries and production rate. While the two are linked they are not the same thing. Boeing was never planning on delivering 168 787s last year. Why? Because the 787 only reached 14/ month in the second quarter of the year (https://www.reuters.com/article/us-boei ... SKCN1PO249). You’re a smart man- how do you get 168 deliveries if you only start building 14/month ~3 months into the year?

Deliveries also ignore planes built but not yet delivered. Boeing has several of those thanks to the HNA group. Some are still not delivered (the ones painted in Vistara livery) or were only delivered this month (one of Bamboo’s).

That year end rush of 21 planes included a whooping 7 QR 789s delivered from 12/26 to 12/28. Do you think Boeing built all those planes in December?


I am not confusing any thing. I gave you the three numbers, loading, roll out and deliveries. Non reached rate 14 through the year. No starting slow and increasing the rate during the year. Otherwise you have to talk about 11.5 Month or we see the start of the draw down.

If you look at spreadsheet from ALL THINGS 787
Take the loading numbers they should be the most exact of the numbers providing the rate.
January 14, starting at rate 14
February 12, 2 frames down
March 15, 1 up
April 14
May 14
June 14
July 13, 1 down
August 15, 1 up
September 13, 1 down
October 15, 1 up
November 12, 2 down
December 9, 5 down
Average loading rate 13.33

I have to say rate 14 applied for the beginning of the year, but not in the end.


Year end is skewed as Boeing shuts down for holidays (a couple of days for Thanksgiving and about a week for Christmas/New Years). You are taking the 14/month far too literally.


I do not take it to literally. It was always talked about monthly rate as the years average. When we talked about rate 8.3 for the 777, a rather exact number, it meant 98, 99 or 100 frames produced and delivered. Give or take a frame, but not 10.
Apart from that not only December is down but also November.
 
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Polot
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Re: Boeing considering another 787 production cut

Sat Jan 25, 2020 7:18 pm

mjoelnir wrote:
Polot wrote:
mjoelnir wrote:

I am not confusing any thing. I gave you the three numbers, loading, roll out and deliveries. Non reached rate 14 through the year. No starting slow and increasing the rate during the year. Otherwise you have to talk about 11.5 Month or we see the start of the draw down.

If you look at spreadsheet from ALL THINGS 787
Take the loading numbers they should be the most exact of the numbers providing the rate.
January 14, starting at rate 14
February 12, 2 frames down
March 15, 1 up
April 14
May 14
June 14
July 13, 1 down
August 15, 1 up
September 13, 1 down
October 15, 1 up
November 12, 2 down
December 9, 5 down
Average loading rate 13.33

I have to say rate 14 applied for the beginning of the year, but not in the end.


Year end is skewed as Boeing shuts down for holidays (a couple of days for Thanksgiving and about a week for Christmas/New Years). You are taking the 14/month far too literally.


I do not take it to literally. It was always talked about monthly rate as the years average. When we talked about rate 8.3 for the 777, a rather exact number, it meant 98, 99 or 100 frames produced and delivered. Give or take a frame, but not 10.
Apart from that not only December is down but also November.

Boeing is closed for two days in November which only has 30 days to begin with. Again Boeing was not at rate 14 at the beginning of the year. They did not miss expectations by 10 planes. Just because because there were 14 loadings doesn’t mean they were at rate 14. Just look at the historical data. Boeing 787 in 2018 was at 12/month the entire year, perfectly matching the year’s average monthly leadings. But they still only loaded 9 in December. They also loaded 14 in March 2018 and August 2018. That doesn’t mean they were at rate 14.

Rate 14 was achieved in 2nd quarter of 2019 (not Jan 1 like you keep on acting). If you assume 9 months at 14/month and 3 at 12/mo you get 162 planes. Boeing delivered 158 planes. There are 4 HNA ntu 787s that are destined for Vistara but not yet delivered that all rolled out in July or August 2019 (I’m not talking end of December production holdouts here). You can see them right at the top of the spreadsheet you are mentioning in the current production tab. That is 162 right there not including any other planes built in 2019 but not yet delivered or delivered this month (likely during ramp up there was a month or so where it was at ‘13/mo’).

I don’t know why you are trying to argue they are not or never reached rate 14. The data clearly shows Boeing 787 production is at rate 14 at the moment.
 
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reidar76
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Re: Boeing considering another 787 production cut

Sat Jan 25, 2020 9:31 pm

Average net orders for the 787 have been 83.7 per year in the last decade (2010-2019). Those orders support a rate of 7/month. The only reason Boeing could keep 787 delivery rate higher, is because of the backlog from before the first 787 was delivered.

I think widebody demand is slowing down. The previous decade (2010-2019) has been unprecedented. Look at the numbers from astuteman in post above from earlier today. This won't continue. If we estimate that the next 6 years will see an average of 70 net orders per year for the 787, we can stipulate the effect on the backlog. In the table below I assume 11.5 production months per year, to give it some slack. Also remember that all airlines doesn't want deliveries as fast as possible, so a healthy program needs a decent backlog.

Image
 
WIederling
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Re: Boeing considering another 787 production cut

Sun Jan 26, 2020 8:30 am

Polot wrote:
Boeing is closed for two days in November which only has 30 days to begin with. Again Boeing was not at rate 14 at the beginning of the year. They did not miss expectations by 10 planes. Just because because there were 14 loadings doesn’t mean they were at rate .................................................................
I don’t know why you are trying to argue they are not or never reached rate 14. The data clearly shows Boeing 787 production is at rate 14 at the moment.



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scbriml
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Re: Boeing considering another 787 production cut

Sun Jan 26, 2020 9:01 am

RJMAZ wrote:
Demand would have to reduce significantly and orders to replace the original 787-8's will be coming very soon.


Define "very soon".

The first 787 was only delivered towards the end of September, 2011 - less than eight and a half years ago. With all the benefits that a CFP fuselage is supposed to bring, I don't see replacements for those frames being ordered for a long time yet. :shakehead:

You're going to have to look somewhere else for more 787 orders.
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flee
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Re: Boeing considering another 787 production cut

Sun Jan 26, 2020 9:21 am

Another reason why rate 14 cannot be sustained (apart from the lack of orders) is that early customers' orders have now been fulfilled - these customers had their deliveries delayed and are willing to take aircraft as soon as possible. More recent customers have the their delivery dates fixed without needing to worry about delays. They are more likely to stick to their original delivery schedules. As such Boeing will find that there will be gaps if they do not reduce the production rates.
 
WIederling
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Confirmed: Boeing to reduce 787 production to 10 aircraft per month in 2021

Sun Jan 26, 2020 10:31 am

scbriml wrote:
RJMAZ wrote:
Demand would have to reduce significantly and orders to replace the original 787-8's will be coming very soon.


Define "very soon".

The first 787 was only delivered towards the end of September, 2011 - less than eight and a half years ago. With all the benefits that a CFP fuselage is supposed to bring, I don't see replacements for those frames being ordered for a long time yet. :shakehead:

You're going to have to look somewhere else for more 787 orders.


788:
The early builds are all heavy set and widely scoped non standard. Real Mk1s.
No idea how attractive they really are. Do they at all perform better than an A330-200?
Last edited by SQ22 on Wed Jan 29, 2020 4:35 pm, edited 1 time in total.
 
travelhound
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Re: Boeing considering another 787 production cut

Sun Jan 26, 2020 10:31 am

reidar76 wrote:
Dutchy wrote:
With, according to wikipedia, 546 undelivered, why do they feel the need to cut deliveries? Are there many orders on the brink of collapse? I mean 550 orders are about 4 years of production, without new orders that is.


According to Boeing (https://www.boeing.com/commercial/#/orders-deliveries), the 787 backlog stand at 520 aircraft (December 2019). With current production rate (14/month) that is three years of production. Of course, the airlines doesn't want aircraft delivered that soon.

Boeing needs to reduce production to a sustainable level. That may well mean a gradual reduction to maybe (+/-) 6/month. Remember at the A330 has outsold the 787 the last decade, but the 787 is currently being produced at more than twice the rate.

Looking at average net orders for the 787 the last decade, the orders can sustain rate 6.8/month. With the softening of the widebody market and increased competition from the A330neo, the 787 production will probably come down to 6/month in a few years.

Image


Out of all of the new plane offerings, the 787 has the broadest customer base for new orders.

This information was current up til Nov. 2019.

The A330 had 339 unfilled orders, with three airlines most likely not to take delivery of all the 119 aircraft they have ordered (Hong Kong Air - 5, Iran Air - 36, Air Asia X - 78). Twenty five airlines had current orders for the A330.

The 787 had 542 unfilled orders, with two airlines most likely not to take delivery of all the 43 aircraft they have ordered (Arik Air -9, Etihad - 34). Forty six airlines had current orders for the 787.

Of the current A330 and 787 customers, 59 would be considered Airbus customers, 54 Boeing customers and 22 Airbus and Boeing customers.

The A330 had an airline quality rating of 0.82, the 787 0.94 and for airlines who operated a mixed fleet 1.23. In other words, the Boeing customer base was of higher quality, even though it was not as large. Going forward, the 787/A330 orders race will probably be won with the airlines who currently operate a mixed fleet.

The A330 had seven lessor customers amounting to 58 orders, whereas the 787 had nine customers amounting to 100 orders.

Of the projected orders required to replace previous generation A330's, 264 orders would be for Boeing 787 customers and 119 for Airbus A330 customers (This is always subject to change).

The A350 had 573 unfilled orders, with eight airlines most likely not to take delivery of all the 114 aircraft they have ordered (United - 45, SriLankin - 4, Libyan- 6, Kuwait - 5, Hong Kong Air - 2, Iran Air - 16, Etihad - 16, Air AsiaX - 10, Afrigiyah - 10). Forty one airlines had current orders for the A350.

The 777/777X had 400 unfilled orders, with four airlines most likely not to take delivery of all the 39 aircraft they have ordered (Voyager Dnepr -9, Pakistan - 4, Etihad - 25). Twenty four airlines had current orders for the 777/777X.

Where the market for the A330/787 can somewhat rely on substantial orders from the A330 replacement cycle, new orders for the A350/777X is dependent upon a relatively small 777-300ER replacement cycle (i.e. there are currently 973 orders for the A350/777 to replace approximately 750 aircraft in the 777-300ER size bracket).

With world affairs being what they are, but airline profitability being historically very high, there could always be motive for Airbus and Boeing to reduce their prices to attract new orders from cashed-up customers.

For me the 787/A330 is where the game will be played over the next couple of years.
Last edited by travelhound on Sun Jan 26, 2020 10:50 am, edited 2 times in total.

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