18 Sep Boeing’s Production Increase: Big Bet On The Future
In a recent Q&A session with Muilenberg, CEO ofthe Boeing Company, the chief executive officer announced that the company has decided to increase production rates for its Boeing 787 to fresh record highs starting in 2019. The production rate for the Boeing 787 will be increased from the current 12 aircraft per month, which puts annual outpute at 140-145 units to 14 aircraft per month, which puts annual output at 165-170 units.
Boeing expects demand for roughly 5,000 aircraft in the small wide body segment, where the Boeing 787-8 and Boeing 787-9 are active, as well as the Airbus A350-900 and the entire Airbus A330neo family. Over 700 orders already went to Airbus (OTCPK:EADSF) and over 500 already are for the Boeing 787-8 and Boeing 787-9, leaving 3,800 aircraft that are yet to be competed for by Airbus and Boeing. Equally dividing these orders between Boeing and Airbus, Boeing could win 1900 orders for the two smallest variants of the Dreamliner and up to 2,500 orders for the entire family.
The important conclusion to draw here is that Boeing is placing a big bet on the future, since its current backlog does not support a rate increase whatsoever.