Boeing’s Biggest Challenge is to make Production of 787 Dreamliner Profitable
There is no denying that 787 Dreamliners have proved to be a big success. Already, 250 have been delivered and the company has pending orders for more than 800 of them before even one had even flown. But Dennis Muilenburg, Boeing’s chief operating officer, is facing a problem and that is of producing 787 Dreamliner profitable.
Whenever, an aircraft leaves the facility, around $26 million is taken from Boeing’s operating profit because the cost of manufacturing the airliner remains quite high. The company has faced many production issues and reliability issues and has even sorted them out.
It is considered that the company will be able to make the production of 787 Dreamliners profitable by later this year. Biggest challenge is for Muilenburg, who is going to become chief executive on July 1.
There are several reasons due to which Dreamliner proves costly and one of the reasons is it requires to have extra workers for each aircraft. There is a need to have ways to make the investments as it has to clear the backlog of 5,700 orders of commercial aircrafts worth $435bn. They have to clear the waiting list without affecting profit margins.
Greg Smith, Boeing’s chief financial officer, has stated that the company has been improving when it comes to improvements on unit cost for the 787. Problems with regard to the Dreamliners are considered acute as they are now proving difficult to be manufactured reliably.
To cite an example, the 787’s wings and fuselage are made of plastic composites and not of aluminum. The design has added to the cost.
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