June 17, 2013
Credit: John Croft
Boeing Commercial plans to take a close look at increasing production rates across its product line given growing demand for civil aircraft.
“We have to think through whether we want to go for higher rates,” CEO Ray Conner told reporters on Sunday ahead of opening of the Paris air show. Conner did not go into specific numbers, but highlighted that a lot of analysis into supply-chain capacity and Boeing’s internal ability to ramp up has already taken place, ahead of the decision to raise the 737 rate from 38 to 42. Conner’s preliminary conclusion is that “there is room for it both within Boeing and the supply chain.”
As well as the increase in the 737 rate, the 787 is at seven per month and going up to 10. Conner says Boeing is on track to deliver 60 787s this year; it will reach 11 or 12 during the show now that the grounding has been lifted.
Conner is very optimistic about the market outlook. “We still see tremendous interest to sell more aircraft,” he says, although that may not translate into a huge number of orders at the air show. “We are going to have a decent show,” Conner predicts. Also, “some exciting things are going on.”
Boeing is widely expected to launch the 787-10X at the show, possibly on Tuesday, on the back of at least one major order. United Airlines is understood to be converting options from a previous 787 order into firm commitments for the larger model. “We will just see how things go this week,” Conner says.
He is adamant that Boeing has the “much broader” product line in the widebody segment and therefore will be in a good position to compete for a large market share. Airbus had recently said it is aiming for more than 50% of the market. But Conner contends it will be difficult for Airbus to compete with the 787 and 777X with only the A350.
Boeing is still figuring out the details of how to accommodate the planned 18-ft. stretch needed for the 787-10X. The decision will be influenced by whether the fuselage sections can still be transported by the Dreamlifter fleet. “We still look at the transportation options,” Conner says.
The slow-selling Boeing 747-8 will not be made obsolete by the 777-9X once that aircraft becomes available at the beginning of the next decade, Conner argues. While Conner concedes the market for very large aircraft is “tight,” he says “the -8 still has operating economics that are [attractive] in high-density markets.” He sees a niche between the -9X and the Airbus A380 for the aircraft, and Boeing has “a lot in the works” in terms of 747-8 orders.
Conner argues that the -8 will be particularly attractive for airlines that also operate the freighter version. And the aircraft “still looks pretty solid against the -9X” in terms of its operating economics, he says.