Boeing is considering another cut to 787 Dreamliner production

FAN Editor

Shares of Boeing slipped into negative territory in Friday trading after CNBC confirmed the company is considering an additional cut to production of its 787 Dreamliner jet.

The potential reduction shows Boeing’s problems extend beyond the troubled 737 Max to its higher-priced long range jets. Those planes have grown in importance, with the Max grounded and deliveries of those planes to airlines are halted.

Airlines and other customers pay the bulk of the planes’ price when they take delivery, a factor that will further dent Boeing’s free cash flow in the year ahead if the 787 production cuts go into place.

Boeing in October said it planned to reduce output of the 787 wide-body jets from 14 per month to 12 per month. The company’s planned cut to 12 per month was scheduled to take place later this year. But Boeing sees the market for wide-body jets softening slightly, so the company is considering cutting 787 production to 11 per month or 10 per month.

A Boeing ground test crew member examines a Boeing 787 Dreamliner.

Getty Images

“We maintain a disciplined rate management process taking into account a host of risks and opportunities. We will continue to assess the demand environment and make adjustments as appropriate in the future,” Boeing said in a statement to CNBC.

Boeing’s stock slipped as much as 0.9% in trading on Friday from its previous close of $317.79. Shares have fallen 8% in the past three months as the company’s 737 Max crisis has continued much longer than the company previously expected.

On Tuesday the company pushed back its expectation for when the 737 Max will return. Boeing told shareholders that it now doesn’t expect regulators to sign off on the 737 Max until the middle of this year, more than six months later than it previously forecast. Some airlines who operate the 737 Max now forecast that they’ll go another summer — their most lucrative season — without the fuel-efficient jetliners.

Boeing is also scrambling to shore up its finances and is negotiating with banks for a loan of $10 billion, according to people familiar with the matter.

– CNBC’s Phil Lebeau contributed to this report.

Free America Network Articles

Leave a Reply

Next Post

CDC confirms second US case of coronavirus and is monitoring dozens of other potential cases

U.S. health officials said Friday they diagnosed a second patient with the China coronavirus — a Chicago woman who returned from Wuhan with the infection, and they are monitoring dozens of other potential cases here. There are 63 cases being monitored in the U.S. that stretch across 22 states, including […]