Amid certification preparations for the and ongoing development of the recently launched 787-10, has announced plans to increase the overall production rate for the new widebody to 12 per month in 2016 and to 14 per month by the end of the decade.
Announcing the rate increases yesterday during a third-quarter earnings call, Boeing President and CEO Jim McNerney said the 787 program continues to show improvements despite the early problems related to the battery issues and the ongoing service reliability challenges. “We delivered 170 aircraft in the third quarter, including 23 787s, and are producing them at the rate of seven per month with increasing efficiency as we go to 10 per month by year-end,” he noted.
Overall, 96 787s have been delivered to 16 customers and the fleet is making around 200 flights per day. However, McNerney acknowledges the urgency with which the company is tackling the reliability problems that have plagued the 787. “Improving dispatch reliability of the 787 is one of our top priorities. We are not satisfied with the fleet-wide performance, even though it is at 97% on average. There are some customers who are not at that level and we’re not pleased about that. We still have more work to do and while we are otherwise pleased with feedback in areas like fuel burn, we will not be satisfied until we meet customer expectations across the board,” he said.
McNerney adds that resolving issues with the software is a key priority. “Old messaging [in the software] is roughly one-third of the issue. It’s frustrating for us and very frustrating for our customers. It’s an ‘all-hands-on-deck effort.’ We want to get everyone higher but when you add it all up there’s been a steady improvement.”
With the production rate increases, as well as the launch of the 787-10 on the back of firm orders for 90 aircraft, Boeing also revealed it is extending the accounting quantity of the overall program by 200 to 1,300. The increased block size reflects Boeing’s estimate of when the program will be in clear profit. “The higher deferred production balance is associated with the higher flow as well as the 787-10 introduction,” said Boeing CFO Greg Smith. The higher costs are expected because of the increased flow-time with the introduction of the -10 “as well as learnings associated with that,” he added.
Investments continue to be made to bolster the line at Charleston, S.C., as well as at Everett, Wash., where the company has added a position for the wing-body join earlier in the line.
Many changes have resulted from input from employees who are “coming up with better ideas for increasing flow after 140 aircraft,” said Smith. However, because of the increased production rate, the balance is also expected to decline at a faster rate, he adds.
McNerney also reaffirmed the company’s widely expected plan to launch theby year-end. “We continue to anticipate -8X and -9X this year, the latter of which will be the only twin-engined, twin-aisle with 400 seats in the market,” he added. The overall backlog now stands at 4,787 aircraft , valued at $345 billion.
[Editor's note : This article has been updated to correct the value of the backlog .]