Boeing upbeat on 787 rate increase, mum on 787-10

The Boeing Co. expects to reach a goal of producing 10 787s per month next year but might not finish fixing some earlier-built Dreamliners until as late as 2015, company executives said Monday.

“We are really in a significant period of growth,” Pat Shanahan, Boeing’s senior vice president of airplane programs, said during a conference call with RBS Capital Markets.

As the jet maker is ramping production, it’s also adding in a new version of the jet, the 787-9, and pondering a third member of the Dreamliner family, the 787-10. The currently produced model is the 787-8.

The 787-10, which would be the largest Dreamliner, looks to be a “great, great airplane,” said Larry Loftis, general manager of the 787 program. But Boeing has “work to do” before the company would be willing to launch that program. It’s unlikely the 787-10, once launched, would enter commercial service until the “back end” of the decade, Loftis said.

Boeing is confident of the larger Dreamliner’s technical performance but, financially, the company wants to be “very measured,” Shanahan said.

Years of delays in the 787 program has pushed Boeing’s break-even point out to after the 1,100th 787 has been delivered. That means the jet maker’s focus is profitability.

“We’re really trying to reduce the cost to build the airplane,” Loftis said.

Delivering 787s quickly will be key to reaching that 1,100-jet milestone. The company recently increased 787 production to five 787s monthly. Boeing already has met its minimum 787 delivery goal for 2012, handing over 35 787s so far, Loftis said. And Boeing is well-positioned to increase production to seven 787s per month by summer and 10 by the end of 2013.

But the 787 program still has challenges. It could take until 2015 for Boeing employees to finish readying some of the earliest produced 787s for delivery, Loftis said.

By early next summer, Boeing hopes to be assembling the first 787-9, which seats about 40 passengers more than the 787-8. The 787-8 carries 210 to 250 passengers, depending on the configuration. The first 787-9 is expected to be delivered in early 2014.

Both Shanahan and Loftis expressed confidence in the 787-9 schedule. Shanahan noted that Boeing added an extra, temporary production line in Everett, often referred to as the “surge” line, to help accommodate the 787-9. Some of the 787-9 suppliers are ahead of schedule, Loftis said.

“From a schedule standpoint, the airplane is meeting all of its engineering milestones,” he said.

Ultimately, about 70 percent of 787s built will come from Everett and 30 percent will be assembled at Boeing’s site in South Carolina. Should the company need to further increase 787 production, space isn’t a limiting factor, Shanahan said, noting the North Charleston location has “untapped capacity.”

As with the 787-10, Boeing executives also declined to say when an updated version of the 777 might be introduced. In late October, Boeing CEO Jim McNerney mentioned that a refreshed twin-aisle jet known as the 777X might not be delivered until the early 2020s.

Shanahan also responded to questions about Boeing’s 747-8. Sales for the refreshed jumbo jet have been slow, though the company has several sales campaigns for the passenger version. A slow cargo market isn’t helping fill 747-8 slots for the freighter, either; Boeing’s betting the freight market will pick up again in 2014, Shanahan said.

“It’s really about filling (production slots) in 2015 and 2016,” he said.

Herald reporter Michelle Dunlop: 425-339-3454 or mdunlop@heraldnet.com.

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