Lost 787 Revenue: WAG $30bn

The WAG estimate for lost revenue to Boeing for the delays of the 787 program is around $30 billion through 2013, based on some production estimates from a Goldman Sachs report issued this morning.

Goldman predicts $3 billion in penalty payments.

Goldman revised its delivery forecast, based on the Boeing program update conference call Wednesday, from 629 airplanes through 2013 to 407 airplanes. This forecast, by aerospace analyst Richard Safran, shapes up this way:

GS Current Assumption

2009: 25

2010: 60

2011: 85

2012: 120

2013: 120

Total: 407

January 2008 assumption

2009: 109

2010: 120

2011: 120

2012: 140

2013: 140

Total: 629

Difference: 222

We took these figures and applied it to Boeing’s list prices for the 787-8 and 787-9. Goldman’s data doesn’t break out how many of each type might be delivered during these years, so we calculated the average price of both models. At the low end based on all 787-8 deliveries, Boeing’s lost revenue during this period is $35.96 billion. Based on all 787-9 deliveries, the average lost revenue is $43.18 billion.

Applying an average 25% discount, which is not atypical in deals, the low end revenue loss is guesstimated to be $26.97 billion and the high end revenue loss is guesstimated to be $32.38 billion. Taking a somewhat middle-ground figure, we settled on $30 billion in lost revenue through 2013.

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