Boeing says commercial aircraft deliveries rose nine per cent in the first three months of calendar 2018 as healthy market conditions and a robust backlog offered a “solid foundation” for its plans to increase production over the next year.
The commercial aircraft delivery numbers were part of Boeing’s calendar 2018 first quarter earnings announced on Wednesday (US time), which showed the global aerospace giant achieved a 57 per cent increase in net profit for the three months to March 31 2018.
Boeing said its commercial airplanes division, which generates the bulk of the company’s revenue – delivered 184 aircraft in the quarter, compared with 169 deliveries in the prior corresponding quarter. Its delivery guidance for the full 2018 calendar year was unchanged at 810-815 deliveries, compared with 763 deliveries in calendar 2017.
“We continue to see the trend of diverse and balanced demand from a geographical perspective, as well as across the spectrum of airline business models,” Boeing chief executive Dennis Muilenburg told media and analysts during the company’s first quarter earnings presentation on Wednesday (US time).
“There also is more balanced demand between fleet growth and replacement of older aircraft, and we are seeing more consistent and stable customer purchasing patterns.”
Notable deliveries included the 787-10 to launch customer Singapore Airlines (SIA) and the first 737 MAX 9 to Indonesia-based Lion Air Group.
“Our plan to increase Dreamliner production to 14 airplanes a month in 2019 is well supported,” Muilenburg said.
Among the other aircraft programs, Boeing said it planned to increase the 767 production rate to three aircraft a month in 2020, from 2.5 aircraft a month currently.
The move reflected strength in the cargo market, with freight traffic up 7.7 per cent in the year to February 2018, Boeing said.
“Today’s 767 freighters are the best they’ve ever been and the demand for the 767 continues to grow from both freight and military customers around the world,” Muilenburg said.
“The freight cargo market had been down for a couple of years. We saw some re-strengthening last year, and we see further strengthening year-to-date.”
Separately, it said the development of its 777X program, which is a contender for Qantas’s demanding Project Sunrise requirement for an aircraft capable of operating nonstop from Australia’s east coast to London and New York, “remains on track”, with production of the first fuselage for structural testing underway in the quarter.
The 777-9X is due to enter service in 2019, with the 777-8X to follow in 2022.
VIDEO – Boeing says 777X development is on track. Here Boeing details the 777X’s flightdeck design and philosophy.
Boeing reaffirmed previous guidance that the 737 production rate would increase to 52 aircraft a month later in 2018 and 57 a month by 2019. Currently, Boeing’s production rate for the 737, comprising both the 737NG and MAX platforms, is 47 a month.
Muilenburg said Boeing was “on top of” the challenges with the CFM LEAP 1B engines that power the 737 MAX and production of the aircraft’s fuselage at Spirit AeroSystems.
“We’re continuing to meet all of our customer delivery commitments,” Muilenburg said.
“We’re ever vigilant on our supply chain. We know there will be pressure points as we ramp up, but we’re confident that we’ll continue to ramp up and hit our delivery marks.
“We expect about 40 per cent to 45 per cent of our 737 deliveries this year will be MAXs. That’s right on plan.”
In March, it was reported Boeing had experienced a slowdown of 737 fuselage deliveries from Sprit AeroSystems due to issues with the Wichita, Kansas company’s supply chain. The slowdown was expected to be temporary.
Meanwhile, CFM said in January it had fallen behind schedule in delivering its LEAP 1A and LEAP 1B engines to Airbus (for the A320neo family) and Boeing (for the 737 MAX family) due to the need to replace and/or reinspect some parts.
NMA evaluation continuing
Muilenburg said Boeing was continuing evaluate its proposed new mid-market aircraft (NMA).
“We have not made a launch decision at this point, but we’re having very good discussions with our customers, continuing to hone details of not only the airplane but perhaps even more importantly the associated production system, taking a hard look at the business case,” Muilenburg said.
“Timing of that decision is still to be determined as we work our way through the details. We have time to do our homework and do it well, but I will say we’re making progress and clearly advancing our analysis.”
“We still see that airplane, if we decide to launch, is a 2025 timeframe airplane in terms of entry into service.”
Asked when Boeing would have to make an announcement to launch the program in order to meet the 2025 timeframe, Muilenburg said: “We’re not going to pin that down too tightly.”
“Really this is about having the business case discipline and making sure we have crystal clarity on the future production system, which is part of our broader enterprise transformation.
“But this is something that we’ll be getting to over the next year, if you want to put a rough bounding on it.”
The NMA study was focused on a two-aircraft family that would carry between 225-275 passengers anywhere from 4,500-5,000nm. It would be powered by an engine capable of producing 50,000lb of thrust.
Boeing posts big lift in net profit
Boeing has three main units – Commercial Airplanes, Defence, Space and Security, and the recently-established Global Services that provides training and professional services.
The company reported net profit of US$2.477 billion for the three months to March 31 2018, up 57 per cent from US$1.579 billion in the prior corresponding period.
Total revenue rose six per cent to US$23.382 billion, Boeing said in a regulatory filing on Wednesday (US time).
Commercial Airplanes achieved a five per cent lift in revenues to US$13.652 billion, while Defence, Space and Security had a 13 per cent increase in revenue to US$5.762 billion.
And Boeing’s third business unit Global Services improved revenue eight per cent to US$3.943 billion.
“With a strong first quarter on which to build continued momentum for the year, our team remains focused on further driving both growth and productivity,” Muilenburg said.