An Air Bridge Cargo 747-8F at Paine Field (Photo: AirlineGeeks | Katie Bailey)
Boeing announced today its results for the second quarter of the year and it comes as no surprise that the balance continues to be negative, even with the significant contribution of Boeing Defense & Space and Boeing Global Services.
With Boeing Commercial facing such a challenging time, the company is trying to rearrange its landscape as best it can. To do that, it needs to change the pace of production on its assembly lines. With aircraft demand in a steep decline and with no immediate improvement of demand insight for the next years ahead, the efforts to increase production and deliveries have vanished.
Therefore, Boeing announced that it will reduce the recovery pace of 737 MAX production. Two years ago, it desperately sought to bring production of the model to 57 per month and today confirmed that it expects to have a rate of 31 aircraft per month by 2022. Despite this, the 737 MAX will be the main cash generator of the company for the next 10 to 12 years, under the assumption that there will be no new orders in that period or new cancellations, a situation that is more than unlikely.
The 787 Dreamliner is again reducing its monthly rate. From a historical peak of 14 aircraft per month, it expects to manufacture six per month in 2021 and the company is strongly considering consolidating the two production lines at a single plant, either in Washington or South Carolina.
In the case of the 777 and 777X, the reduction is significant. Adjusting to a scenario where wide-body aircraft are going to be difficult to fill and leading customers not needing them as quickly, the production rate will drop to two planes per month when the previous forecast was five per month.
The company also announced that it will not modify the production rate of the 767 and 747 programs. The 767 in its cargo version will continue at the established rate of 3 per month, not taking into account the production of the KC-46 Pegasus, a military variant of the 767-400.
For the 747, the production rate of 0.5 aircraft per month and the lack of new orders brought a sad confirmation during the shareholder meeting. The last Boeing 747 in history will leave the factory in 2022, closing a production cycle of more than 50 years.
The 777X’s date of entry into service has also moved to 2022, one year after the last proposed date, three years after the original entry date. This marks a significant delay, given that the aircraft should have entered service in 2019.
The company’s sales fell 25 percent to $11.81 billion in the quarter, almost $1.4 billion less than the previously estimated $13.16 billion.
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