Sean Broderick's aviation career started in 1991, working for Airbus in Toulouse. His industry experience includes four years with an aviation consultancy, where he worked on the successful launch of a U.S. Part 121 carrier; 12 years with an airport association as a magazine editor and communications executive; and more than 15 years of full- and part-time work as a journalist, writing about air transport and business aviation. &nbsp;
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Sean Broderick

The combination of strong traffic demand and a projected high rate of widebody replacements in the coming years cemented Boeing's confidence in the move to boost its 787 production rates to 14 per month, the company’s top executive said.

 


Speaking at a recent Morgan Stanley analyst conference, Boeing President and CEO Dennis Muilenburg confirmed that the long-planned 787 production-rate increase from 12 to 14 is a go. "That's been our assumption, but now [we're] confirming that previous assumption," he said. "We are going to 14 a month in 2019."

 


Boeing started September with a backlog of 689 Dreamliners on firm order waiting to join the 600-aircraft in-service fleet. The backlog does not include aircraft under tentative agreements, such as the eight 787-9s in a memorandum of understanding with Malaysia Airlines announced September 12.&nbsp;

 


The order book includes aircraft in what Muilenburg called the “skyline,” or delivery slots created by boosting production rates. “We are working skyline positions in 2019, '20, '21, '22,” he said. “This is not the idea of pulling demand forward or somehow accelerating production [to fill orders faster]. This is filling skyline into the future.”

 


Boeing's bullish outlook for the model stems in part from better-than-forecast traffic demand. Boeing's long-term forecast, which sees the global fleet absorbing 41,000 deliveries in the next 20 years, assumes a 4.7 percent annual increase in passenger traffic. The real-world, year-to-date figure is 7.7 percent, International Air Transportation Association figures show, while the five-year average is 6.4 percent.

 


“Traffic patterns around the world continue to be very strong,” Muilenburg said. “We expect nominally a 6 percent to 7 percent [growth] rate over the next several years.”

 


Widebody replacement needs are also driving demand. Boeing’s 20-year outlook sees 40 percent of the projected deliveries—8,000 of which it expects to be widebodies—as replacing in-service aircraft, compared with historical norms of around 20 percent.

 


“We still see a significant widebody replacement wave coming in early in the next decade as we have a number of widebodies globally that are going to hit the 25-year point,” he said.

 


While global traffic demand will fall, Boeing continues to express confidence that production rates will not suffer significantly as a result. The combination of fleet-replacement needs and specific pockets of expected long-term high demand, such as Asia, gives airframe OEMs cushion that should help them avoid major rate fluctuations common following past growth cycles.

 


“In the past, you might have seen recessions or localized regionalized economic effects pull traffic down in one part of the world or another, and that would have an undue ripple effect into our business and how we're able to manage production rates,” Muilenburg said. “We're no longer seeing that characteristic.

 


“Every year in Asia alone, there are 100 million people that fly for the first time,” he continued. “That tells us there's long-term growth opportunity there, and we can use that to manage production rates, be disciplined in our approach to keep supply and demand in balance.”

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