Dissecting Boeing CEO’s statement next new airplane will cost $50bn

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By the Leeham News Team

April 15, 2024, © Leeham News: It was a stunning number.

Boeing CEO David Calhoun said his successor will have to decide on whether, or how, Boeing will proceed with its next new airplane. The price tag, he said, will be $50bn.

The Bombardier C Series was the last all-new, widely used single-aisle jetliner design completed and in service today as the Airbus A200. China's C919 has only a handful of aircraft in service and Russia's MC-21's EIS is uncertain. Credit: AP Canada.

No airplane program at Boeing, except for the 787, ever came close to this cost. No program at Airbus did, either—and certainly none came close at Bombardier or Embraer.

The 787’s cost was a financial and industrial nightmare. Design, production, and industrial snafus combined to create delivery delays of 3 ½ years. Deferred production and tooling costs reached a peak of about $32bn. Customer compensation and other factors are believed to have boosted the total cost to around $50bn, a figure Boeing never confirmed.

On March 25, Boeing announced Calhoun will retire no later than Dec. 31. Chairman Larry Kellner won’t stand for reelection to the Board of Directors at the annual meeting (date TBA). Stan Deal, the CEO of Boeing Commercial Airplanes (BCA), retired immediately. He was replaced by Stephanie Pope, the former CEO of Boeing Global Services and current EVP and COO of The Boeing Co. Pope’s new role at BCA is in addition to her corporate position.

Shortly after the Monday Morning Massacre, Calhoun appeared on the financial network CNBC and, among other things, made his stunning price tag prediction. It’s a figure he referenced in passing before—but this time it caught the attention of broader media.

Single-aisle airplane programs historically cost between $10bn and $12bn. Widebody programs cost between $15bn and $20bn, excluding cost overruns. Bombardier’s C-Series, the most recent all-new, widely used single-aisle airplane, cost an estimated $6bn before Airbus took over.

Boeing hasn’t done an all-new new single-aisle airplane since 1982’s 757. Airbus hasn’t done an all-new single-aisle airplane since 1984’s A320.

LNA explains Calhoun’s number below.

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