The production gap on the Boeing 777 program has been the main subject of various articles AeroAnalysis wrote. In two previous pieces I had a look at some of the factors that influence order inflow and backlog. In Part 1 AeroAnalysis had a look at the impact of oil prices and competition, while Part 2 dealt with the timing of the Boeing 777 and need for higher production rates.
In some way these factors, eventually, have impacted the current gap that Boeing is facing. It is impossible to quantify the impact of all these factors individually. It is, however, possible to combine the impact of all these factors in the gap analysis.
In one of AeroAnalysis’ articles that dealt with the gap in particular, rough calculations showed that the gap until 2020 was about 170 units. A new and refined model that also incorporates new order inflow shows a gap of 144 units. This shows that Boeing has been able to close the gap a bit, but not enough to maintain current production rates.
Figure 1: Effective production rate Boeing 777 program (Source: AeroAnalysis)
One of the things that reduced pressure on Boeing is a rate cut to 84 airplanes a year by 2017, which narrows the gap by 16 units annually. Additionally, effective 2018, 1 slot per month is reserved for the Boeing 777X. These 777X will not be delivered, meaning that effective rate is about 6 aircraft per month for 2018 and 2019.
A look at the gap
Figure 2: Visualization of the production gap (Source: AeroAnalysis)