In September 2017 Boeing spoke about increasing their 787 production rate by 2019. In March 2018 Boeing spoke about moving the rate from 12 to 14 aircraft per month “next year” (2019). We are about halfway to next year, what does the case look like?
Since the program started delivering aircraft, 636 were delivered through year end 2017. The chart shows how Boeing has ramped up production. However, for the past three years, the program seems to have reached peak production.
But when adding orders to the chart we can see the pressure is building to increase that rate. The well-known hiccups at the start of the program did not diminish program interest.
After the slow years from 2008 through 2012, Boeing saw rising program interest, with a burst in 2013. Post that bubble year, we can see steady growth through 2017.
Now that the 787 has serious competition at the lower end from the A330neo and at the upper-end from the A350, Boeing cannot assume program interest will remain at current rates. Airbus is improving its own A350 production and has a well-oiled A330 production system.
Boeing is right at the point when it can make the rate increase. The following chart shows how its 787 production process has moved down the learning curve. Its two 787 FALs are humming and getting better at moving through the backlog.
Combining orders and delivery data from Boeing and matching customer orders and deliveries, we averaged the days between orders and deliveries to smooth out the numbers. With this smoothing, the trend is clear. Boeing can deliver an order for a 787 faster than it can for a 737. The market especially wants the 787-9 and Boeing is happy to oblige.
As fuel prices start to rise again, demand for fuel efficiency will once again take a prime position for fleet managers. This is a 787 strength. Because Boeing has moved so far down the learning curve it can increase rates, probably at low risk. Absent any labor strife and customer demand remaining firm, the 787 program should hum right along from 12 to 14 per month next year.
Co-Founder AirInsight. My previous life includes stints at Shell South Africa, CIC Research, and PA Consulting. Got bitten by the aviation bug and ended up an Avgeek. Then the data bug got me, making me a curious Avgeek seeking data-driven logic. Also, I appreciate conversations with smart people from whom I learn so much. Summary: I am very fortunate to work with and converse with great people.
I think the rate increase is tied to the introduction of the -10 model, which can only be produced in South Carolina. The increase from 12 to 14 per month is based on increasing the South Carolina rate from 5 to 7 per month to match Everett’s rate. This allows South Carolina to produce the -10s without eliminating their ability to produce -9s.