Leeham News and Analysis

Boeing Commercial plans for KC-767 protest rejection

Another in a series of cartoons from The Mobile Press-Register’s JD Crowe. The reference to flying tricycles is to a comment a Boeing official made about Northrop Grumman’s planned production model for the KC-30 was like building tricycles at Christmas.

Flight International reported today that Boeing may tap the 767-300ER to help fill the gap created by 787 delays. Writes Flight: “Boeing has yet to tell 787 customers exactly how their delivery schedules will be impacted by the latest delay, but it has floated the idea of producing brand new 767-300ERs to help fill the capacity gap.”

Boeing would gain the 767 capacity from the KC-767 program, which looks doubtful now that the Air Force has awarded the tanker contract to Northrop Grumman. Boeing protested the award, but has acknowledged the likelihood of prevailing is remote. Accordingly, supply-chain and production capacity that had essentially been reserved for the tanker could shift to the commercial 767-300ER.

Boeing should know by June 19 whether the protest will be upheld.

The company would not be able to boost the production all that much vis-a-vis 787 demand, and not immediately. The current production rate of the 767 is one a month; Boeing could double that, or go slightly more to perhaps an incremental 15 a year, or 24-27 a year, including current customers, but not before 2010. By then, Boeing originally planned to be delivering 120 787s a year.

Here’s a Boeing-oriented cartoon.

Boeing complains that a cost disadvantage is that it has to pay for health care costs while Airbus, which builds the A330 on which the KC-30 is based, is part of Europe’s social health care system and doesn’t have this burden. (One could argue the taxes paid by Airbus for the national health care system is their representative burden, but the point in the cartoon is on the mark nonetheless.)

A little humor in a humorless debate….

Northrop’s supplier distribution map.