Boeing expects to easily top the 763 commercial aircraft it delivered in 2017—an industry record—by delivering 810-815 aircraft in 2018.
The manufacturer believes the cyclical nature of commercial aircraft ordering has been mitigated by a “more balanced” base of airline customers, both geographically and in terms of types of airline business models, Boeing chairman, president and CEO Dennis Muilenburg told analysts and reporters. There is also a greater balance between growth and replacement orders, he noted. As a result, there is now a “more consistent, stable” aircraft order stream than in the past, Muilenburg said.
“Airlines continue to report robust profits, and passenger traffic in 2017 grew more than 7% [year-over-year (YOY)] through November and cargo traffic exceeded 9% growth through November,” Muilenburg said, adding that Boeing expects 5.5%-6% YOY passenger traffic growth in 2018.
Boeing Commercial Airplanes booked 414 net orders in the 2017 fourth quarter, taking its backlog to over 5,800 aircraft valued at $421 billion. That equates to seven years of production.
Deliveries are expected to be led again by 737s in 2018. Boeing moved to a 737 production rate of 47 per month in 2017 and plans to raise the monthly rate to 57 in 2019. Production slots for the 737 are sold out into the early 2020s, Muilenburg said.
Boeing delivered the first 74 737 MAX 8s in 2017, including 44 in the fourth quarter. The MAX program backlog stands at more than 4,200 aircraft. Muilenburg said over 40% of 737s produced in 2018 will be MAXs.
Boeing Commercial Airplanes’ (BCA) 2017 revenue decreased 2% YOY to $56.7 billion, but the unit’s operating profit jumped to $5.4 billion from $2 billion in 2016. BCA’s operating margin improved 6.2 percentage points YOY to 9.6% and reached 11.5% in the 2017 fourth quarter. Boeing’s overall revenue fell 1% YOY in 2017 to $93.4 billion. The company projects a rise in revenue to the $96-$98 billion range in 2018, including $59.5-$60.5 billion for the Commercial Airplanes unit.
Boeing’s 2017 net profit rose 67% YOY to $8.2 billion.
Source: atw
