Yesterday we took a look at how Airbus might reach its 2018 target of ~800 aircraft. Today we look at Boeing’s 2018 target of “810-815” aircraft.
The chart shows how Boeing has managed to increase its delivery rate over the past two years. Notice also the much wilder swings in 2018, reflecting the supply chain stress an shortages in items like engines that have slowed the flow of deliveries. In the first eleven months of 2017, Boeing averaged 64 deliveries per month and this year the average through November was also 64 per month.
The volume business is the 737 line and the next chart shows deliveries by 737 model.
Comparing the averages, in 2017 Boeing averaged 44 737 deliveries per month and in 2018 the average is 46 per month. Again we can see from the chart the wide delivery swings this year compared to last. While Boeing may be targeting a rate increase, that target will be held ransom by the supply chain. Note the swing towards the MAX from the NG.
Through November this year Boeing is at 704 deliveries and has to deliver at least 106 aircraft in December to reach 810. Last year the 737 accounted for 69% of deliveries and through November this year, it’s at 72%.
What might December deliveries need to look like to reach at least 810 for the year? We estimate one 747, one 767, five 777s and 12 787s. That means the 737 line needs to deliver 87 for a 2018 total of 809. Jefferies analyst Sheila Kahyaoglu estimates Boeing needs to deliver 79 737s to meet the year-end goal. “Our estimate assumes deliveries of the 737 reach 79 in December, which is unlikely,” Kahyaoglu said, which means our estimate of 87 is probably also unlikely.
If that is the case, where can Boeing make up the difference? The most likely area would the 787 which is the next highest volume model. Last year Boeing averaged 11 787s per month and this year through November they are at 12 per month. It does not look like the 787 can deliver faster. Consequently, if the 737 line generates 580 deliveries this year (+9.6% over 2017) and our other estimates hold, Boeing looks like delivering 789 for 2018.