XWB
in service - 11 years
Posts: 16,115
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Post by XWB on Sept 13, 2017 17:36:18 GMT 1
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Post by Jkkw on Sept 13, 2017 22:38:49 GMT 1
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philidor
in service - 6 years
Posts: 8,950
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Post by philidor on Sept 14, 2017 10:10:18 GMT 1
This is a major surprising decision, displaying a lot of confidence, to say the least.
The present rate of twelve per month (or about 140 per year) means that, in early 2019, the present backlog will be down to about 350 787s. At the future rate of 14 per month (or about 170 per year), that is hardly more than two years of production.
Boeing must believe in a very high level of sales in the next three or four year to make the new production rate sustainable. Is this hope realistic ? In present market conditions, I have some doubts.
Then, what can be the reasons for the production push ? I think there is a 2021 deadline (2021 is ten years after the first 787 delivery) for offsetting 787 deferred production costs. By increasing production before the deadline, Boeing improves its financial outlooks and may avoid being in a forward-loss position soon.
EDIT : Leeham writes that Boeing also increased the 787 accounting quantity (or block) by 100 units ; I see this move as further confirmation that the rate increase is linked to the 787 deferred-costs issue.
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XWB
in service - 11 years
Posts: 16,115
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Post by XWB on Sept 14, 2017 10:16:09 GMT 1
Then, what can be the reasons for the production push ? I think there is a 2021 deadline (2021 is ten years after the first 787 delivery) for offsetting 787 deferred production costs. By increasing production before the deadline, Boeing improves its financial outlooks and may avoid being in a forward-loss position soon. It's being speculated that the increased rate will generate the cash flow that is needed during the 777X transition. Wall Street is pretty sensitive when it comes down to cash flow.
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philidor
in service - 6 years
Posts: 8,950
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Post by philidor on Sept 14, 2017 10:29:41 GMT 1
It's being speculated that the increased rate will generate the cash flow that is needed during the 777X transition. Wall Street is pretty sensitive when it comes down to cash flow. Contribution to cashflow generation is very important. Likewise, a large one-off loss on the 787 programme would throw a lot of doubt on all Boeing's forecasts and financial prospects.
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Post by ca350 on Oct 31, 2017 19:17:53 GMT 1
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Post by kevin5345179 on Dec 2, 2017 15:41:47 GMT 1
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Post by peter on Dec 2, 2017 16:17:04 GMT 1
A very coincidental and very convenient platform to advertise her new book "The Crash Detectives"
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Post by addasih on Dec 8, 2017 0:04:20 GMT 1
RR engine problem
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Post by kevin5345179 on Jan 13, 2018 15:59:34 GMT 1
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