Wednesday, October 23, 2013

Boeing announces 787 production rate increases

In their 3rd quarter earnings announcement this morning, Boeing said they will increase the 787 production rate in 2016 from 10 to 12 aircraft per month eventually increasing to 14/month by the end of the decade.  Even though the fact that they are increasing the production rate comes as no surprise, the announcement coming this early was.  I was expecting an announcement of production increase next year.

Even though they haven't announced which site will benefit from the rate increase, I fully expect that Boeing South Carolina (Charleston) will see most if not all the increase in the rate of the 787.  This rate increase is being timed with the need to produce 787-10 aircraft in sufficient quantities by 2017 which is when Boeing expect to start testing the double stretch of the 787.  I can also see some interim production increases (to 11 in 2015 and to 13 in 2017-2018).

This announcement also will fuel the discussion as to where the 777X will be built.  With JALs announcement that they will buy the A350, there is increasing outlook that Boeing will build more of the new large jet outside of Japan (even if ANA orders it).  I believe that Boeing will build this airplane in Everett and assuming that the future 787 increases are built in Charleston, I can see a stronger case that the final assembly of the 777X will take place in Everett.

From Boeing's press release:

During the quarter, the 787-9 completed first flight. With the successful launch of the 787-10 and continued strong demand for the 787 family of airplanes, the company intends to increase the 787 production rate from 10 to 12 per month in 2016, with plans to increase to 14 per month before the end of the decade.

3 comments:

1coolguy1 said...

It's anyone's best guess yet it may be that as the 747 production is slowed those workers and possibly facilities can absorb the 787 production increase.

Nick Johnson said...

It's surprising that Boeing isn't ramping up 787 production at a faster rate after 10/month. The only reason the A330 is still selling is lack of early 787 availability, and A350 sales have benefited from the long delay getting the 787 out the door. With the 9 and 10 both in demand, Boeing is leaving sales and revenue on the table by not ramping up faster.

Uresh said...

You just can't go up in rate automatically. It takes a lot of planning as well as analysis that the market can absorb the additional supply that is being produced. IT requires a lot of work with suppliers as they have to increase their rates as well as the sub-suppliers.

Boeing tried a large and fast increase in the 737 production rate in 1997 and it was disaster that they don't want to repeat again.