787's Are Selling Slow This Year... Why We Shouldn't Worry

If you follow the markets, you will have noticed a major trend in stories around Boeing., mainly that the 787 isn't selling well. Granted, Boeing has not sold a lot of Dreamliners this year, but we need to remember to keep all numbers in context. To fully put this in perspective, we need to go back to when the 787 was first being built. 

Promises made by the 787 were lofty and game changing. Indeed the introduction of the 787 has been a major game changer. Massive amounts of weight were shed from the aircraft with the major incorporation of composites. Often the statistic that is thrown around is that 50% of the aircraft is composites. I hate that Boeing uses this number, because in my mind it is wrong. The number isn't inherently wrong, it is 50% of the aircraft by weight. By volume though, 70% of the aircraft is composites, which means only 30% of parts are made of other material, yet that 30% of parts makes up half the weight of the aircraft. This just goes to show how much metal parts really weigh.

With major weight reductions and new engine technologies, the aircraft pulled out a whopping 20% increase in fuel efficiency. Famously the first ANA pilot to take control of the aircraft had to recheck his instruments when he saw how little fuel the on-board computer predicted it would need for the transpacific flight to Japan.

These innovations made the 787 a hugely popular plane up front, selling almost 1,000 aircraft before the first one ever left the ground. There in lies the issue we are dealing with right now. Boeing has been churning through this enormous backlog, but it is still a good 700 airplanes deep. Boeing is pushing these out at 12 per month, 144 aircraft a year, but all of 2016 and 2017 are still completely sold out.

2018 and 2019 slots are almost completely full too. This means that if an airline was to order aircraft right now, they might not be able to get them for 4+ years. Imagine ordering a car for 2020. The demand up front was so heavy that the 787 needs time to catch up. In the mean time airlines are slowing down ordering of new planes right now, this tends to go in cycles. If they order those planes they might now see them for many years, so why purchase so far in advance. 

I think the market and people following the industry should take a measured approach here. The brand new 777x program is having similar sales issues right now. Despite launching with record order numbers before the plane has yet to be built for the first time. Let's all step back and keep in mind that the 787 has orders on the books to cover 6 years of production, and that alone is impressive.