Lootman wrote:djbenedict wrote:Perhaps you are also underestimating quite how significant the 737 is to Boeing ("a big part of their mix"):
TOTAL UNFILLED ORDERS (COMMERCIAL)
737 747 767 777 787 Total
4,573 18 102 433 549 5,675
(You can find this information on Boeing's website here:
http://www.boeing.com/commercial/#/orders-deliveries )
Yes, but if you look at revenues then it is a slightly different story, since the 737 is the only narrow-body plane there, and so is much cheaper. I believe they sell for $100 million or less. Whereas a 787 runs around $300 million and the new 777-X, if and when it gets off the ground, will be more like $400 million.
Then there is the military and aerospace side as well. Not to mention the very lucrative order for two new Air Force Ones.
Amazing they have orders for that many 767's. Must be for cargo planes. And of course too bad Boeing didn't keep its sibling plane, the 757, being as that fills the medium size and range need that it is struggling with. It's as happy going 400 miles as 4,000 miles. Fun trivia fact - the 757 is the only narrow body plane designated as "Heavy".
The RevenuesModel Net Cost £m Unfilled Orders Total %
737 50 4,573 228,260 53.00
747 210 18 3,780 .88
767 110 102 11,220 2.60
777 180 433 77,940 18.07
787 200 549 109,800 25.45
It could be argued that the net costs used in the above table aren't representative. However, the table is simply to point out roughly how significant Boeings income is from the 737.
It doesn't end there though.
July 11th, 2019 (Economies of Scale)
Five Basic Facts About Boeing Missing From Coverage Of the 737 MAX Storyhttps://www.forbes.com/sites/lorenthomp ... 57ea8e521b
Boeing makes widebody jets too—747,767,777,787—but without 737 the company could not remain competitive in any market segment with European rival Airbus. ...
What is largely missing from coverage of the MAX crisis, though, is an explanation of how important Boeing’s sole single-aisle offering is to the company’s fortunes, to the nation’s trade balance, and to the fate of local economies in the U.S. A basic rule of thumb in the global duopoly that Airbus and Boeing currently share is that if a company falls below 40% of total worldwide backlog, its ability to price successfully against the other player begins eroding. Boeing’s strategy in other segments of the aerospace and defense market assumes continued strong cashflow from the commercial side, which would be unlikely in the absence of 737 MAX.July 14th 2019
April 2018 Letterhttp://www.richardaboulafia.com/shownote.asp?id=564The 737’s first problem, above, shows that the market is up gauging, and Boeing’s next single aisle will simply need to be a larger clean-sheet design (if only to accommodate ever-growing engines under its wings). Since 797 will be a twin aisle, it won’t have much in common with the new single aisle.Global Air Travel Growth
Boeing Stock Has Much Bigger Things to Worry About Than the 737 MAXhttps://www.barrons.com/articles/boeing ... 1561995357
Boeing—and its suppliers—have been relatively impervious to the MAX woes because growth in air travel has been strong for a decade. Air traffic growth, however, is slowing as the global economy decelerates. And that may be what hurts Boeing stock more in the future than any of the more dramatic issues facing the company.22 July 2019 (Forecast Debt Increase)
Boeing slides after ratings agencies turn negative on maker of grounded 737 Maxhttps://www.cnbc.com/2019/07/22/boeing- ... lainternal
Moody’s warned that it could cut Boeing’s credit ratings if “it becomes apparent that the grounding will extend into 2020 and Boeing does not reduce the production rate to conserve working capital.” ...
Boeing’s debt could rise by $10 billion to more than $24 billion by the end of the year because of the Max grounding
Noting Boeing did cut production and have now suggested they may have to cease completely unless the Max is returned to service by March 2020. In such circumstances will they pay their employees? If they don't they may lose skills?
Boeing Group has three major sources of income. The largest is Commercial Airlines accounting for approximately 60% of the Groups business. And the largest selling vehicle is [still] grounded. Boeing do not have a competitive rival to Airbus in the single aisle category. Albeit the cooperation with Embraer may have potential.
Boeing have bought back $39Bn of their own stock over the last 5 years. They have reduced share count from 767m to 586m. In the same period they have spent $17Bn on R&D. Whilst the EPS has obviously benefited, the same may not be true of the value of the share buy back costs.
In a large group such as Boeing it's always very easy to find "bad news". And Boeing has other problems, albeit they are dwarfed by the Max issue.
AiYn'U