User avatar
Matt6461
Posts: 2908
Joined: Wed Oct 16, 2013 9:36 pm

Re: Boeing 787 deferred production cost watch

Mon Aug 05, 2019 5:36 pm

Lightsaber wrote:
There will be a 787 production rate decrease at some time.


At the longest time horizon, this is of course true. We'll have a 787 successor or maybe we won't have societies capable of supporting air travel at all.

In the midterm (next ten years or so), IMO the 787's build rate depends on (1) whether Boeing builds the NMA and (2) the extent to which airlines/passengers accept narrowbody long haul on the new NB's. If (1)&(2) displace much/most of the 787's <9hr flying then building 10/mo will be difficult. If they don't, then by Boeing/Airbus CMA's the world will need ~500 WB's/year by later next decade. If 787 maintains its current market share of WB deliveries rates of 18-20 are feasible.

I'm not predicting either the low-end or high-end case - too many factors at play for that right now.
 
Sokes
Posts: 183
Joined: Sat Mar 09, 2019 4:48 pm

Re: Boeing 787 deferred production cost watch

Mon Aug 05, 2019 7:10 pm

MIflyer12 wrote:

Every publicly-traded U.S. firm publishes a balance sheet regularly. Do you think Boeing's lenders, shareholders (it's majority institution-held) and bondholders are unfamiliar with its debt-to-equity ratio?


I was more concerned about suppliers. I agree Boeing suppliers will be familiar with Boeing's financials. I was rather arguing in principle and also had not publicly traded companies in mind.



United857 wrote:
...
Book equity is a reflection of the book value of assets (lower of cost or market value) minus book value of liabilities. This is highly inaccurate because assets can only be written down when values decrease, but are never written up when values increase. For example, the value of the land of the Boeing factory in Everett, WA is worth far more today than how much it cost back in the 60's when it was acquired, yet it is prohibited to write the value of that land up to market value (you are not even allowed to adjust for inflation). Thus the book value of equity is typically massively understated for companies as old as Boeing.
...

Good point.
However I am under the impression that during insolvency proceedings more often than not money is not enough to cover all liabilities. Therefore I still think that either operational creditors should get preference or positive equity should be obligatory.



WBM wrote:


The reason cash flow is so important is because cash doesn’t lie. It is hard to fake, and when combined with other factors it tells a story that is important to understand for investors.

Net profit is important, but the problem is it is possible to be profitable, and bankrupt. It happy all the time.


To give an example:
https://www.forbes.com/sites/timworstal ... 5130685daa
"Rolls Royce has today announced one of the largest losses in British corporate history - £4.6 billion, call that $7 billion among friends or a whole lotta money. However, it's not actually a loss at all, it's an accounting charge."


Sokes wrote:
We shall see how it works out for Airbus to rely for their A350/ A330 Neo on a turbine manufacturer with negative equity.


I correct myself. From above's link:
"Reported loss reflects a non-cash impact of £4.4bn period-end mark-to-market revaluation of our derivatives and a £0.7bn charge for financial penalties from agreements with investigating bodies."
The general population is usually not interested in economic matters. However should Rolls Royce ever go bankrupt people may ask questions as to the usefulness of gambling in publicly traded companies. Banks would rather throw two billion $/ year on the company than to risk such a discussion. Therefore no engine manufacturer is further away from bankruptcy than Rolls Royce.
Why can't the world be a little bit more autistic?
 
WIederling
Posts: 8503
Joined: Sun Sep 13, 2015 2:15 pm

Re: Boeing 787 deferred production cost watch

Mon Aug 05, 2019 8:06 pm

9Patch wrote:
    WIederling wrote:
    9Patch wrote:
    You're wrong, as usual.
    Increasing the accounting block from 1000 to 2000 doesn't mean Boeing has to sell 2000 to break even on the program, and it doesn't mean the deferred costs doubled.
    It means Boeing is spreading the deferred costs over more units.
    Think of deferred costs as a pizza, whether you cut it into four slices or eight slices, it's still the same size pizza.


    Outch.

    Everything has a simple explanation that is patently wrong.
    you've just made one of those :-)))))))

    Care to point out where I'm wrong and you're right?
    The fact that you chose not to is very telling.


    Why should deferred cost double? pray tell me.
    It had a defined peak of humungous height.
    currently at $22b decreasing at $1b/quarter. 22 quarters ( @42 frames/q := 924 frames on top of 856 in use) delivered to go.
    ( I don't see much leeway for coming down on suppliers even further.
    we already see the fall out from that move.)

    The accounting block can be bigger than required but it must be able to absorb deferred cost fully.
    Otherwise the project is in forward loss. Boeing denies this.

    Production @14/m will not be sustainable increasing cost per
    as there is a significant drop off in taken slots in the near future.
    backlog is ever contracting.

    to take up your analogy you need more pizza and not more pieces to feed your minions.
    Murphy is an optimist
     
    Sokes
    Posts: 183
    Joined: Sat Mar 09, 2019 4:48 pm

    Re: Boeing 787 deferred production cost watch

    Tue Aug 06, 2019 3:13 am

    lightsaber wrote:

    The A350 is oversold. There are not enough near term slots to compete.

    Boeing has sold net about a hundred a year since announcing the rate increase:
    https://en.m.wikipedia.org/wiki/List_of ... deliveries

    Airbus sells about net 40:
    https://en.m.wikipedia.org/wiki/List_of ... deliveries

    Lightsaber


    Why does Airbus not increase production capacity?

    lightsaber wrote:
    The China deal for a hundred 787/777 is on hold (in my opinion) due to trade tensions. But if that goes through, there will be a shortage of 787 near term slots:

    https://www.latimes.com/business/la-fi- ... story.html

    Lightsaber


    The latimes article speaks mostly about replacing old B777 with B777-9X:
    "The discussions center on about 100 twin-aisle jets: 787 Dreamliners as well as 777X planes, the newest long-range aircraft in Boeing’s lineup, said one of the people, who asked not to be named because the talks are private. Negotiations have focused in particular on the 777-9 variant. ...
    The new planes would help replace an earlier generation of 777 jetliners, one of the people said. Boeing has sold 101 of those aircraft to Chinese airlines, according to its website. "
    Why can't the world be a little bit more autistic?
     
    9Patch
    Posts: 311
    Joined: Wed Mar 13, 2019 10:38 pm

    Re: Boeing 787 deferred production cost watch

    Tue Aug 06, 2019 4:34 pm

    WIederling wrote:
    Why should deferred cost double? pray tell me.

    When did deferred costs double? Pray tell me.


    The accounting block can be bigger than required but it must be able to absorb deferred cost fully.

    The accounting block can be bigger only if Boeing sells more 787s, which they will. Increasing the accounting block is good thing. It allows them to spread the costs over more units.


    Otherwise the project is in forward loss. Boeing denies this.

    Where did they deny this?


    Production @14/m will not be sustainable increasing cost per
    as there is a significant drop off in taken slots in the near future.
    backlog is ever contracting.

    They don't need to sustain production at 14/month to pay down the deferred production cost. Upthread it was mentioned they need to sell another 600 planes which they will easily do over the life of the program.


    to take up your analogy you need more pizza and not more pieces to feed your minions.

    My analogy is that deferred costs are the pizza. Deferred cost are decreasing. The pizza is being eaten. Eventually it will be gone.
    Last edited by 9Patch on Tue Aug 06, 2019 4:45 pm, edited 1 time in total.
     
    WIederling
    Posts: 8503
    Joined: Sun Sep 13, 2015 2:15 pm

    Re: Boeing 787 deferred production cost watch

    Tue Aug 06, 2019 6:04 pm

    9Patch wrote:
    WIederling wrote:
    Why should deferred cost double? pray tell me.

    When did deferred costs double? Pray tell me.


    Your wording.

    What the debate club queens never get is that
    Schopenhauer's "38 Ways to Win an Argument"
    did not represent a How To but were intended
    as an exclusion list of techniques not conducive
    to a productive argument.

    .
    Murphy is an optimist
     
    User avatar
    seabosdca
    Posts: 6472
    Joined: Sat Sep 01, 2007 8:33 am

    Re: Boeing 787 deferred production cost watch

    Tue Aug 06, 2019 7:23 pm

    I can't believe we have had a year of arguing over a number that tells investors more about Boeing's situation in 2011 than its situation today. The deferred production cost that remains today is an artifact of Boeing's massive screwup in designing the 787 production process, a screwup which had mostly been worked through by 2012.

    What matters today is not the 787 but the MAX. But if you are looking at only the 787, what matters today is that Boeing's revenues for delivered 787s are exceeding the cost of production by a healthy margin. To what extent that excess is allocated to deferred production cost, profit, or something else is a fundamentally uninteresting question for someone trying to look forward and evaluate their likely return on an equity investment in Boeing.
     
    JayinKitsap
    Posts: 1400
    Joined: Sat Nov 26, 2005 9:55 am

    Re: Boeing 787 deferred production cost watch

    Tue Aug 06, 2019 7:32 pm

    seabosdca wrote:
    I can't believe we have had a year of arguing over a number that tells investors more about Boeing's situation in 2011 than its situation today. The deferred production cost that remains today is an artifact of Boeing's massive screwup in designing the 787 production process, a screwup which had mostly been worked through by 2012.

    What matters today is not the 787 but the MAX. But if you are looking at only the 787, what matters today is that Boeing's revenues for delivered 787s are exceeding the cost of production by a healthy margin. To what extent that excess is allocated to deferred production cost, profit, or something else is a fundamentally uninteresting question for someone trying to look forward and evaluate their likely return on an equity investment in Boeing.


    Yes it doesn't show exactly how profitable the 787 is, but it is profitable enough to pay down $30M of deferred production cost each plane. That is a huge number by itself.

    From a business perspective it indicates the 787 program is well managed and quite profitable, now if they can return the MAX to the positive side.
     
    9Patch
    Posts: 311
    Joined: Wed Mar 13, 2019 10:38 pm

    Re: Boeing 787 deferred production cost watch

    Tue Aug 06, 2019 8:21 pm

    WIederling wrote:
    9Patch wrote:
    Why should deferred cost double? pray tell me.

    When did deferred costs double? Pray tell me.


    Your wording.

    NOT my wording.
    I said the accounting block doubled, NOT the deferred cost doubled.
    You keep conflating the two, which is wrong.

    What the debate club queens never get is that
    Schopenhauer's "38 Ways to Win an Argument"
    did not represent a How To but were intended
    as an exclusion list of techniques not conducive
    to a productive argument.

    When all else fails, change the subject.
     
    Sokes
    Posts: 183
    Joined: Sat Mar 09, 2019 4:48 pm

    Re: Boeing 787 deferred production cost watch

    Fri Aug 16, 2019 5:30 am

    Check this 70 year oil price chart:
    https://www.macrotrends.net/1369/crude- ... tory-chart

    2004 was the start of high oil prices and Boeing started selling the B787. In Sept 2014 oil prices collapsed.
    Between 2004 and December 2014 Boeing collected 1071 orders for the B787.
    When the oil price collapsed roughly around 200 planes were delivered.
    https://en.wikipedia.org/wiki/Boeing_78 ... deliveries

    I wonder how deferred production costs would have looked like if the oil price hadn't be so gracious to Boeing.
    Why can't the world be a little bit more autistic?
     
    SFOtoORD
    Posts: 1084
    Joined: Tue Jul 03, 2007 2:26 am

    Re: Boeing 787 deferred production cost watch

    Fri Aug 16, 2019 6:40 am

    Sokes wrote:
    Check this 70 year oil price chart:
    https://www.macrotrends.net/1369/crude- ... tory-chart

    2004 was the start of high oil prices and Boeing started selling the B787. In Sept 2014 oil prices collapsed.
    Between 2004 and December 2014 Boeing collected 1071 orders for the B787.
    When the oil price collapsed roughly around 200 planes were delivered.
    https://en.wikipedia.org/wiki/Boeing_78 ... deliveries

    I wonder how deferred production costs would have looked like if the oil price hadn't be so gracious to Boeing.


    Pointless hypothetical. No different than asking what if’s about the subprime financial crisis, 9-11 or the Cold War. Sure, they would have sold less planes, but the industry was already in a severe crisis from 9-11 and low fare carriers that was still in motion. I don’t think carriers would have been sitting around asking themselves if they could have put 707s back in service.
     
    Sokes
    Posts: 183
    Joined: Sat Mar 09, 2019 4:48 pm

    Re: Boeing 787 deferred production cost watch

    Fri Aug 16, 2019 6:59 am

    SFOtoORD wrote:
    Pointless hypothetical.


    That's why I am here. I love pointless hypothetical. Why are you here? Wondering which plane to order?

    SFOtoORD wrote:

    Sure, they would have sold less planes, but the industry was already in a severe crisis from 9-11 and low fare carriers that was still in motion. I don’t think carriers would have been sitting around asking themselves if they could have put 707s back in service.


    I wasn't thinking Boeing would not have been able to sell the plane. I was wondering which price Boeing would have got for them?
    Why can't the world be a little bit more autistic?
     
    WIederling
    Posts: 8503
    Joined: Sun Sep 13, 2015 2:15 pm

    Re: Boeing 787 deferred production cost watch

    Fri Aug 16, 2019 7:32 am

    Sokes wrote:
    Check this 70 year oil price chart:
    https://www.macrotrends.net/1369/crude- ... tory-chart

    2004 was the start of high oil prices and Boeing started selling the B787. In Sept 2014 oil prices collapsed.
    Between 2004 and December 2014 Boeing collected 1071 orders for the B787.
    When the oil price collapsed roughly around 200 planes were delivered.
    https://en.wikipedia.org/wiki/Boeing_78 ... deliveries

    I wonder how deferred production costs would have looked like if the oil price hadn't be so gracious to Boeing.


    2003 start a war in the region of oil producing countries: Who would have thunk the price would rise ?
    This created the playing field for that super capable, super cheap Dreamliner.

    Then, how does the oil price cut into deferred cost?
    ( okay, it does into deflating deferred cost after creating that bow wave.)

    So this answers the "other end":
    Pressure release on a delayed project came from the GFC mostly. Customers more busy with not losing limbs
    than getting new frames.
    This could have been B's planning from the get go as capsizing of the ballooning housing market
    and a resulting GFC had been warned about from about 2000 onwards.
    Murphy is an optimist
     
    olle
    Posts: 1151
    Joined: Tue Feb 06, 2007 3:38 am

    Re: Boeing 787 deferred production cost watch

    Fri Aug 16, 2019 10:10 am

    JayinKitsap wrote:
    seabosdca wrote:
    I can't believe we have had a year of arguing over a number that tells investors more about Boeing's situation in 2011 than its situation today. The deferred production cost that remains today is an artifact of Boeing's massive screwup in designing the 787 production process, a screwup which had mostly been worked through by 2012.

    What matters today is not the 787 but the MAX. But if you are looking at only the 787, what matters today is that Boeing's revenues for delivered 787s are exceeding the cost of production by a healthy margin. To what extent that excess is allocated to deferred production cost, profit, or something else is a fundamentally uninteresting question for someone trying to look forward and evaluate their likely return on an equity investment in Boeing.


    Yes it doesn't show exactly how profitable the 787 is, but it is profitable enough to pay down $30M of deferred production cost each plane. That is a huge number by itself.

    From a business perspective it indicates the 787 program is well managed and quite profitable, now if they can return the MAX to the positive side.


    I can imagine that internal at Boeing the 787 numbers even is by now the cashflow is fantastic, the executive board must put questions for new projects such as 797 if the program will turn profit considering the 787. 787 has by now been produced in such huge number that by any previous example it should had paid back all investments, and should now together with 737 pay for next project the 797.
     
    olle
    Posts: 1151
    Joined: Tue Feb 06, 2007 3:38 am

    Re: Boeing 787 deferred production cost watch

    Sat Aug 17, 2019 6:49 pm

    Leeham.net's analysis predicts that with current orders, Boeing can fill 2020 and 2021, but will only have enough scheduled deliveries to fill about half of 2022's production slots and 25% of 2023's production slots. From 2024 onwards, Boeing will only have enough scheduled deliveries to handle 10% or less of the available production slots.

    Boeing has not made mention of a production cut, but unless Dubai this year and Farnborough next year bank a couple hundred 787s, then Boeing will likely have to announce a cut by mid-2020 in order to reduce the number of empty slots from 2022-onwards.

    Will this mean that the production cost for 787 go up and be more complicated to undercut 330 in price or will the effect be the opposite that Boeing lower it prices and kill 330 ones and for all?
     
    Sokes
    Posts: 183
    Joined: Sat Mar 09, 2019 4:48 pm

    Re: Boeing 787 deferred production cost watch

    Sun Aug 25, 2019 5:20 pm

    Let's see how wide-body deliveries developed the last years. I took 2018 and 2006 as examples.
    according to Wikipedia:

    deliveries 2006
    B777: 65
    B787: from 2011
    B747: 14
    B767: 12
    A340: 24
    A330: 62
    A350: from 2014
    A380: from 2007

    That makes a total of 177 wide-body deliveries in 2006.

    deliveries 2018:
    B777: 48
    B787: 145
    B747: 6
    B767: 27 (tanker/ freighter?)
    A340: last 2012
    A330: 49
    A350: 93
    A380: 12

    There were 353 wide-bodies without the 27 B767 delivered in 2018. One has to add a few to account for B767 freighters.

    I was wondering: There are still MD freighters in the air which need replacing. But is it worth replacing an A330 after 20 years?

    From 1998 the A330-300 had a MTOW of 230t. The "A330 and A340 Write off/ Retirement/ Scrap thread" gives the impression as if there are hardly A330s scraped.
    viewtopic.php?t=1411873
    Anybody knows if 230t version are planned to be scraped? I mean scraped for part out, not sold to another airline or returned to lessor.

    According to Wikipedia (which seems to rely on flightglobal) as of July 18:
    B747-400:
    339 of 694 in service

    A340:
    159 of 377 in service

    B777:
    55 of 88 B777-200 in service
    338 of 422 B777-200ER in service
    50 of 59 B777-200LR in service
    48 of 60 B777-300 in service
    Even the -300 non-ER versions are good enough to fly passengers and cargo from Europe to the Arabian Gulf. It has an OEW of 161 t and an OEW of 299 t. With un-freedom of the air it may be the right plane for the job. But assuming all these planes are to be replaced, B777s without -300ER add up to below 500.

    To replace all B747-400, A340 and B777 (not -300ER) would require around three years wide-body production from July 18 or roughly 2 years from now.

    B767:
    "In July 2018, 742 aircraft were in airline service: 73 -200s, 632 -300 and 37 -400 with 65 -300F on order; the largest operators are Delta Air Lines (77), FedEx (60; largest cargo operator), UPS Airlines (59), United Airlines (51), Japan Airlines (35), All Nippon Airways (34)."
    https://en.wikipedia.org/wiki/Boeing_767#Operators

    If only around 400 B767 got scrapped so far it means nearly all B767 from 1992 onwards are still in service.
    Can a B767 only be replaced by a B767 or B797? It is amazing that the plane still soldiers on.
    I have no fixed opinion in this. That's why I kept B767 separate from B747-400, A 340 and B777 (not -300ER)
    Let's assume the planes produced till 97 have to be replaced till 2023. That's very roughly 250 planes from now. Considering that the planes are small it may equal to a capacity of maybe 6 months worldwide wide-body production.

    I doubt A380s beyond the early models get scrapped in quantity before 2030. If they are cheap enough British Airways, unfreedom of the air (e.g. Emirates) and transpacific traffic will make use of them. I may be wrong, though.

    So if we assume a flat economy without need to increase capacity 350 planes/ year will require 3-4 years from July 18 (2-3 years from now) to replace all B747-400, A340 and B777 (not -300ER) and before 1997 B767.

    By 2022 the world's fleets should be very modern. Obviously an upturn in global economy rubbishes this calculation.
    After that replacements will be needed for what are today modern airliners simply because of age. And that is what I wonder about: How long will airlines use a B777-300ER, B787 or A330? If airlines use it as long as B767s, demand looks thin for some years.
    Why or with what to replace a B767? Why or with what to replace a B777-300ER or A330 (>230t)?
    I believe flights above 10 hours or so get new equipment. But will 8 hour flights require new equipment?

    While it sounds amazing, doubling wide-body production from 2006 to more than 350 planes/ year in 2018 was justified. However in two years or so production of wide-bodies will possibly be adjusted.
    Is there something wrong if 350 planes/ year are produced for several years and production has to be cut in half afterwards?
    Or should we rather say by 2022 or so production has to shift from wide-bodies to narrow-bodies?

    My assumptions are too simple? Agreed. It was meant for a rough idea.
    In case the world economy stays flat I doubt Boeing's calculation concerning deferred production costs are conservative enough.
    If the economy does fine, Boeing's deferred production costs will also do fine.
    Why can't the world be a little bit more autistic?
     
    olle
    Posts: 1151
    Joined: Tue Feb 06, 2007 3:38 am

    Re: Boeing 787 deferred production cost watch

    Sun Aug 25, 2019 8:52 pm

    Sokes wrote:
    Let's see how wide-body deliveries developed the last years. I took 2018 and 2006 as examples.
    according to Wikipedia:

    deliveries 2006
    B777: 65
    B787: from 2011
    B747: 14
    B767: 12
    A340: 24
    A330: 62
    A350: from 2014
    A380: from 2007

    That makes a total of 177 wide-body deliveries in 2006.

    deliveries 2018:
    B777: 48
    B787: 145
    B747: 6
    B767: 27 (tanker/ freighter?)
    A340: last 2012
    A330: 49
    A350: 93
    A380: 12

    There were 353 wide-bodies without the 27 B767 delivered in 2018. One has to add a few to account for B767 freighters.

    I was wondering: There are still MD freighters in the air which need replacing. But is it worth replacing an A330 after 20 years?

    From 1998 the A330-300 had a MTOW of 230t. The "A330 and A340 Write off/ Retirement/ Scrap thread" gives the impression as if there are hardly A330s scraped.
    viewtopic.php?t=1411873
    Anybody knows if 230t version are planned to be scraped? I mean scraped for part out, not sold to another airline or returned to lessor.

    According to Wikipedia (which seems to rely on flightglobal) as of July 18:
    B747-400:
    339 of 694 in service

    A340:
    159 of 377 in service

    B777:
    55 of 88 B777-200 in service
    338 of 422 B777-200ER in service
    50 of 59 B777-200LR in service
    48 of 60 B777-300 in service
    Even the -300 non-ER versions are good enough to fly passengers and cargo from Europe to the Arabian Gulf. It has an OEW of 161 t and an OEW of 299 t. With un-freedom of the air it may be the right plane for the job. But assuming all these planes are to be replaced, B777s without -300ER add up to below 500.

    To replace all B747-400, A340 and B777 (not -300ER) would require around three years wide-body production from July 18 or roughly 2 years from now.

    B767:
    "In July 2018, 742 aircraft were in airline service: 73 -200s, 632 -300 and 37 -400 with 65 -300F on order; the largest operators are Delta Air Lines (77), FedEx (60; largest cargo operator), UPS Airlines (59), United Airlines (51), Japan Airlines (35), All Nippon Airways (34)."
    https://en.wikipedia.org/wiki/Boeing_767#Operators

    If only around 400 B767 got scrapped so far it means nearly all B767 from 1992 onwards are still in service.
    Can a B767 only be replaced by a B767 or B797? It is amazing that the plane still soldiers on.
    I have no fixed opinion in this. That's why I kept B767 separate from B747-400, A 340 and B777 (not -300ER)
    Let's assume the planes produced till 97 have to be replaced till 2023. That's very roughly 250 planes from now. Considering that the planes are small it may equal to a capacity of maybe 6 months worldwide wide-body production.

    I doubt A380s beyond the early models get scrapped in quantity before 2030. If they are cheap enough British Airways, unfreedom of the air (e.g. Emirates) and transpacific traffic will make use of them. I may be wrong, though.

    So if we assume a flat economy without need to increase capacity 350 planes/ year will require 3-4 years from July 18 (2-3 years from now) to replace all B747-400, A340 and B777 (not -300ER) and before 1997 B767.

    By 2022 the world's fleets should be very modern. Obviously an upturn in global economy rubbishes this calculation.
    After that replacements will be needed for what are today modern airliners simply because of age. And that is what I wonder about: How long will airlines use a B777-300ER, B787 or A330? If airlines use it as long as B767s, demand looks thin for some years.
    Why or with what to replace a B767? Why or with what to replace a B777-300ER or A330 (>230t)?
    I believe flights above 10 hours or so get new equipment. But will 8 hour flights require new equipment?

    While it sounds amazing, doubling wide-body production from 2006 to more than 350 planes/ year in 2018 was justified. However in two years or so production of wide-bodies will possibly be adjusted.
    Is there something wrong if 350 planes/ year are produced for several years and production has to be cut in half afterwards?
    Or should we rather say by 2022 or so production has to shift from wide-bodies to narrow-bodies?

    My assumptions are too simple? Agreed. It was meant for a rough idea.
    In case the world economy stays flat I doubt Boeing's calculation concerning deferred production costs are conservative enough.
    If the economy does fine, Boeing's deferred production costs will also do fine.



    We have a few factors;

    1. downturn in economy. there is a chance we see a downturn in economy. Mr Trump is doing his best, brexit etc. on the other hand even mr Trump see that a downturn exploding during election campaign means to move back to New York early.

    2. cheap money. the world have seen 15 years of cheap money used in airplanes. what happens with 777-300ER and 380 financed with the money and returns not in line with expectations means that old planes with fly longer and not replaced by new ones.

    3. not expensive oil. oil will not be expensive the next year. new tech replace oil in all sectors except air industry. we see a peak of demand. old airplane might be cheaper then new one to operate.

    Popular Searches On Airliners.net

    Top Photos of Last:   24 Hours  •  48 Hours  •  7 Days  •  30 Days  •  180 Days  •  365 Days  •  All Time

    Military Aircraft Every type from fighters to helicopters from air forces around the globe

    Classic Airliners Props and jets from the good old days

    Flight Decks Views from inside the cockpit

    Aircraft Cabins Passenger cabin shots showing seat arrangements as well as cargo aircraft interior

    Cargo Aircraft Pictures of great freighter aircraft

    Government Aircraft Aircraft flying government officials

    Helicopters Our large helicopter section. Both military and civil versions

    Blimps / Airships Everything from the Goodyear blimp to the Zeppelin

    Night Photos Beautiful shots taken while the sun is below the horizon

    Accidents Accident, incident and crash related photos

    Air to Air Photos taken by airborne photographers of airborne aircraft

    Special Paint Schemes Aircraft painted in beautiful and original liveries

    Airport Overviews Airport overviews from the air or ground

    Tails and Winglets Tail and Winglet closeups with beautiful airline logos