787 Rate Adjustment

The disastrous start to the 787s life is well documented. The post-EIS battery fires that led to the fleet being grounded was another unwelcome phase for Boeing.

But since its 2011 debut, almost 600 examples of the 787-8 and 787-9 have joined the world fleet in service with a dispatch reliability rate second only to that of the 777 family.

The current build rate is whittling down the backlog sharply. Of course, there are orders out there that Boeing can and will win – especially with the uncontested 787-10.  Boeing would like to increase output to 14 airplanes a month, but in reality, rates are likely to stay put for a while and then decline rather than go up.

A slight, but staged rate clipping could emerge by 2022. The current backlog is good for around five years at present rates. Unless the 787 scores triple-digit orders every year between now and 2020, Boeing could reduce the rate to as low as 8 or 9 airplanes a month. Deals are in the pipeline, however, its not clear when these will be firmed up publicly.

Once 787-8 production concludes, Everett may end up responsible for 787-9 production only while the site in North Charleston produces both 787-9 and 787-10. Everett then, seems the most likely site to bear the brunt of any rate adjustments.

777X will offset some production shortfall as rates start to increase on that program, but any reduction in the 787 rate will be disciplined so as not to make sharper and deeper cuts as we’re seeing now on the current 777 family [as it transitions over to 777X].

787 will secure more orders – of that there is little doubt. But Boeing will be keen to also build the backlog up again before it looks at setting new production out records on the program.

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