MIAMI — Boeing has announced today that it will reduce over 15% its 777 production rate during the next year, from 100 aircraft (8.3/month) to 84 (7/month), in order to adjust to widening production and order gap bridge ahead of the forthcoming 777X program.
“We expect some impact on employment and will do our best to mitigate that by placing employees in other jobs across Boeing” said Boeing spokesman Doug Alder. “We are still studying how many roles may be impacted.”
The rate cut seems to be necessary as Boeing does not have enough orders to fill all the 777 delivery slots between now and the proposed initial production date of the 777X. According to a report by Scott Hamilton from Leeham News and Comment “Boeing needs to sell more than 200 777 Classics, all with delivery dates through 2021, to bridge the gap to full production of the 777-8/9.”
To date, there are 176 unfilled orders for the 777-300ER and 42 for the 777F, the freighter variant of the family aircraft.
The last week, Boeing also announced that its 747 program will experience a drastic cut to just six aircraft per year, citing softness in the air cargo market. At that time, Ray Conner, Boeing vice chairman and president and CEO of Boeing Commercial Airplanes commented “While we remain confident in the 747-8’s unique value-proposition and an upcoming replacement cycle for late-model 747-400 Freighters, we’re taking the prudent step to further align production with current market requirements.”
Ramping up the 737 Production
As opposed with the scenario in its wide-body family portfolio, Boeing has disclosed plans to increase the production of the 737 to 57 aircraft per month by 2019.
The current production of the 737 is 42 aircraft per month. Boeing plans to boost the rate to 47 aircraft per month in 2017 and to 52 in 2018. This all happens as 737 MAX production begins to come online over three final assembly lines, including a single surge line just for the MAX at Renton factory. During the Fourth Quarter Earnings Calls held today, Dennis Muilenburg, president and chief executive officer of The Boeing Company said that the decision is supported by the existing strong demand in the narrowbody market segment.
Boeing said it expects to deliver between 740 and 745 jets this year, slightly less than the 762 aircraft delivered in 2015.