787 late fees top $5 billion, says analyst

First the good news — airlines have canceled only 83 orders for the 787, which is now close to 2.5 years late.

Now the bad news: Boeing has racked up $5.1 billion in late fees, according to a Wall Street analyst’s report quoted by AviationWeek reporter Joe Anselmo.

The global airline industry still wants the 787, writes Anselmo. He quotes the report from Macquarie Equities Research’s Robert Stallard, who believes Boeing will pick up another 250 or more Dreamliner orders over the next three to five years.

But the program may never be profitable, Stallard warned in a separate note. Aside from the $5.1 billion in late fees, Boeing is now on track to spend an estimated $2.5 billion more for its ill-advised double-down bet on a second 787 manufacturing line in South Carolina. That’s on top of the $2.5 billion in research and development cost overruns the Company accounted for in the most-recent quarter. And those 83 canceled orders — coming from airlines no longer willing to wait for the plane, which has been delayed six times primarily because of problems caused by Boeing’s extensive outsourcing — represent more than $13 billion in lost potential business, at list prices.

One piece of good news for District 751 members — Stallard said much of the compensation Boeing will pay for the delays will come in the form of 767 aircraft, which are built by Machinists Union members in Everett.

One Response to “787 late fees top $5 billion, says analyst”
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  1. […] one thing the union hasn’t supported is Boeing’s failed outsourcing strategy with the 787, which led to the company being forced into spending billions of dollars last year to acquire the […]

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