Sept. 15, 2016, © Leeham Co.: The CEO of The Boeing Co. is sticking with current guidance for production rates through the end of the decade despite “hesitation” in wide-body orders.
Dennis Muilenburg, speaking at a Morgan Stanley conference, said Boeing Commercial Airplanes will move up from today’s delivery stream of around 740-750 aircraft to “well over 900.”
Even so, Muilenburg acknowledged that production rates for the 787 and 777 are dependent upon improvements in the current softness in orders. Political unrest and general hesitation is slowing orders.
Through yesterday, Boeing still booked only net eight of the 40-50 777 orders needed to maintain a production rate of seven per month through the transition from the Classic to the new 777X.
The effective delivery rate for the Classic beginning in 2018 will be 5.5/mo, Muilenburg said, reiterating a figure previously stated.
But, he said, failure to achieve the sales targets could mean a downward rate adjustment. Several Wall Street analysts already predict a rate of 4-5/mo vs seven.
Muilenburg also reaffirmed plans to take the 737 MAX rate to 57/mo in 2019. The 787 rate remains at 12. Increasing the rate to 14/mo depends on more sales.
Muilenburg said Boeing continues talks with potential customers for the 737-10 and New Mid-range Aircraft (NMA), both of which would have application for the Middle of the Market (MOM) sector.
The 737-10, a concept which has been under study for a year, is a potential stretch of the 737-9. How extensive remains a matter of debate.
The 737-10 is Boeing’s answer to the Airbus A321neo, should it get a green light. This would address the low end of the MOM sector.
The NMA, generally described as a new design, twin-aisle 220-270 passenger aircraft with a range of 4,500nm-5,000nm, would cover the mid- to -upper end of the MOM sector. Boeing defines this sector as above the 737 but below the 787 families.
Muilenburg said Boeing could decide to do nothing at all and compete with its current family of airplanes. He said Boeing could also do either the 737-10 or the NMA, or it could do both.
But there is no rush, he added. The 737-10, which would be a fairly straight-forward derivative of the MAX family, could be ready for service in 2019 or 2020. The NMA, an entirely new design, wouldn’t see an EIS until 2024/25, he said.