|To be assembled in Everett||135|
|To be assembled in Charleston||98|
|Undergoing final assembly||8|
|Storage/Change Incorporation and Re-Work||0|
|Change Incorporation and Re-Work||2|
|Non Customer Flight Tests||1|
|Ready for Delivery||2|
Boeing's 787 program has turned the page and is now (though slowly) become a profit generator for the Chicago based aerospace company. In their 2016 earnings release, Boeing revealed that operating cash is expected to increase by $250mm in 2017 driven mainly by 787 cashflows. Deferred production costs went down by $215mm in the 4th quarter of 2016 to a total of $27.3bn. That's about $1.4bn less than the high of $28.7bn. Still it will take Boeing a meaningful amount of time to recoup all that loss even with the drive to lower production cost now on going within Boeing and with their worldwide supplier base. The mix of 787s being delivered will greatly help going forward as most 787s that are due to be delivered are the larger 787-9s and, starting in 2018, the 787-10. Since the mix of 787s to be delivered are the larger 787-9, I expect that this will be the main driver of 787 profitability this year as these most of these airplanes also don't have delay penalties attached to them from the 787 program delays.
Still with about 700 787s left to deliver (about a 4.5 year backlog at current production levels) Boeing sorely needs additional orders to help fill the hole it created. Obviously current sales campaigns are important but given that the program was launched in 2004 (13 years ago) with a lot of the engineering and design work done over 10 years ago, the 787 might be due for a refresh in the same way Boeing refreshed the 777 program with the 777-300ER and 777F. The 787-8 certainly is in line for a refresh given the engineering was completed on that version 10 years ago. Additionally I can see a 787F variant which I talked about a long time ago but would be a great replacement for the 767F.
Boeing is looking to firm up potential 787 orders thus paving the way for an increase in rate to 14 per month. In my opinion Boeing needs to show a book-to-bill ratio of over 1 which it has struggled to achieve since 2013 when it last achieved a a book to bill of 2.84. Even though Boeing has a backlog of about 700 787s, some of those will not be delivered thus the 4.5 year backlog is probably less. Certainly the rumored Emirates and Singapore Airlines order will help but what will be necessary for a rate increase to 14 is for existing 787 customers to firm up their 787 options.
During January Boeing delivered 12 787 (10 787-9s and 2 787-8s). Through February 8, 2017 Boeing has delivered 514 787s and so far in 2017 14 787 have been turned over to customers. Also in January Boeing started assembly on 11 Dreamliners and rolled out another 8. The holiday pause certainly bought down the number of aircraft that was rolled out but also the start of 787-10 production in Charleston also contributed to the lower roll out in January. Charleston rolled out only 2 787s in January. The efficiency ratio calculated by taking the number of aircraft rolled out and dividing that number by the number of deliveries was 0.67 across the 787 program which again reflects the low number of roll outs. For Everett, the efficiency ratio is 0.75 while for Charleston it was 0.50.
For February, I expect that Boeing will deliver 10 787s (3 787-8 and 7 787-9). 2 787s have already been delivered (1 -8 and 1 -9). A further 6 have had their first flight and two of those have had their customer flight. Included in this total will be the first early build 787 to be delivered this year which has been reworked for Ethiopian Airlines. A second was just flown to Victorville for re-painting and should be delivered by the end of next month. Boeing will also start final assembly of the first 787-10 that is powered by GEnx-1B engines and start ground tests on the 1st 787-10 after it rolls out of the paint hangar. I expect first flight to take place around early March though it's possible it could happen sooner. The time between roll out and first flight of the first 787-9 was 24 days. Given that the 787-10 is a simple stretch, I can see first flight happening sooner. In terms of production, Boeing has already rolled out 6 787s while starting assembly on another 4.
787 Current Production Table
787 Full Production Table