Boeing Co. says it will not increase 787 output unless sales improve, its clearest indication yet that its large jetliner production may have peaked for now, Reuters reports.
“If the market’s not going to demand it, we’re not going to go,” Boeing Chief Financial Officer Greg Smith tells Reuters.
“It’s not the end of the world” if Boeing keeps 787 production at 12 a month instead of lifting it to 14 as planned,” Smith says. “We can still be profitable in the program as I see it today at 12.”
Analysts say Smith’s statement confirmed that Boeing will not overproduce widebody planes and, most importantly, does not foresee an accounting charge for the 787 if output stays at 12.
Boeing recently took an $847 million after-tax charge in its latest result for the 787 program. It also took an $814 million charge for the 747 because sales outlooks did not justify assuming output of that aircraft would rise in 2019 as planned.
Smith’s comments went beyond what he and Boeing CEO Dennis Muilenburg said during Boeing’s results conference call last month. Muilenburg said Boeing would “keep supply and demand in balance” but did not discuss keeping 787 production at 12 a month in detail.
Low oil prices and a series of boom years have slowed orders for new widebody jetliners such as the 787, 777 and 747, raising concerns that Boeing will have to notch down cash and profit targets along with production.
