# Boeing breakeven analysis

From those numbers, I made the assumption forward and backward that on average Boeing raises its list prices about 2. Boeing costs through profile. As the Wikipedia states it: Learning or experience curve Let me introduce the learning curve effect by quoting directly from the Wikipedia: In the next 20 years Boeing sees deliveries of 6, twin-aisle passenger aircraft: List price of the Boeing publishes in its website the list price s of all its models.

This backlog covers the production until somewhere inin order to keep the production line with a steady production rate, I assumed Boeing will sell the necessary aircraft to allow a steady state production of aircraft per year until the end of the exercise in I will discuss them below, indicating the sources used and explaining the assumptions taken.

Number of aircraft sold Boeing publishes in its website the number of aircraft ordered each year. How many carriers will have delayed plane orders by then, or added to their orders?

By then production rate would have had to slow down to about aircraft per month as the backlog would have been already consumed, thus a new cost structure per unit produced could even make the mentioned date to be deferred even later.

The question then is: For starters, Boeing intends to soon put out about ten such super-jumbos each month when it reaches full capacity. With all of the electronics and avionics, massive engine installations, and the myriad of other chores, this is a timeline that frankly sounds too good to be true to a lay person.

A recent article from Flight Global confirmed the order of magnitude for the case of the A Since Boeing has already sold close to of those 2, aircraft, I assumed the rest will be sold evenly every year, or at a rate of 82 aircraft per year from Number of aircraft produced According to news reports, this year Boeing will deliver between 15 — 20 andbeing about two-thirds of the latter.

The list price of the today ranges from Data gathering In order to build the exercise, different sets of data need to be collected. Let me now come back to the price discounts. A leading aviation analyst hinted that: I take the last conference call as an implicit confirmation from Boeing of the discounts it applies to its s.

This result clearly points out how much a delayed programme may hurt the business case of an aircraft development: In labor-intensive industries such as aircraft and shipbuilding, learning primarily results from workers becoming more efficient at the tasks the perform through multiple repetition.

Another leading analyst suggested: Will the United States and the rest of the globe have entered into one recession by or will it be two recessions? Down payment Here I used for the exercise the same assumption I had used to calculate Boeing discounts in previous posts: You may see in the following graphic the cash profile used up to now: In the last conference call, Boeing stated that it sees an addressable market for the in the next 20 years of 5, aircraft this number of aircraft reflects deliveries.

How many airlines will have merged by the ear or the years ?In early ,Boeing Co. decided to gamble \$4 billion to build a new long distance,seat wide body airplane called the Boeing The price tag for thescheduled for delivery beginning in ,is about \$ million mi-centre.com that Boeings \$4billion investment is made at the rate of million a year for the years through.

Boeing is the largest commercial airplane manufacturer in the world. Init began development of thea passenger plane with a range up to 4, miles. First deliveries took place inat a price of about \$70 million per plane.

After the post I wrote the last week with an analysis of when could Boeing break even (Will Boeing ever break even?), I received some feedback in the form of emails, comments in the blog and comments in Scott Hamilton’s blog (Leehamnews) as he mentioned the analysis and linked to it.