Boeing is increasing the production rate of 787

Boeing CEO Dennis Muilenburg announced Wednesday that the 787 Dreamliner production rate will be increased from 12 jets per month now to 14 per month in 2019 and told at a Morgan Stanley industrial conference in Laguna Niguel, California,“We’re very confident we can do that while keeping long-term supply and demand in balance and a healthy production system.”

This measure is seen as a dire necessity as the production of the larger 777 jet has fallen sharply as Boeing is commencing the assembly line for the 777X flight-test planes. Muilenburg also said Boeing has decided that 787 order prospects are sufficiently healthy that it can spread the deferred cost of the program over 1,400 planes, up from the current assumption of 1,300.

Though Muilenburg mentioned that new 787 sales campaigns are active for deliveries early into the next decade as the airplane is performing well, Wall Street analyst Ken Herbert, of Canaccord Genuity, wrote in a note to clients Wednesday that the increase in the production rate seems more driven by Boeing’s push for higher cash flow, helping make up for the reduced cash coming in from 777 deliveries, rather than market demand for the 787.

He further wrote “We are skeptical that (Boeing) will be able to maintain a 14/month rate on the 787 for an extended period of time.” Anyhow there are positive signs as on Tuesday, the prime minister of Malaysia announced a memorandum of agreement with Boeing to buy 10 787-9s.

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