Assessing the 787 production rate increase

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Introduction
Sept. 18, 2017, © Leeham Co.: Boeing last week announced it will take the production rate of the 787 from 12/mo to 14/mo in 2019.

Boeing 787-9. Source: Boeing.

The decision to do so was couched in a strong backlog and strong forthcoming demand by CEO Dennis Muilenburg at a Morgan Stanley conference. But analysts think the move is more about boosting free cash flow and hitting margins than it is about demand.
Summary
  • Boeing sees demand surging from 2019 for widebodies generally and the 787 specifically.
  • Muilenburg says Boeing is working “skyline” positions in 2019 and 2020 (LNC saw these years as already filled).
  • Widebody jets hitting 25 years old early next decade.
  • Airbus concurs.

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