Boeing Co. is moving its 787 Dreamliner assembly lines at a faster pace in anticipation of building more of the wide-bodies during the second quarter of 2019, executives said Wednesday.
The aerospace giant plans to boost production of its popular twin-aisle commercial jet to 14 per month — up from the current dozen — at assembly plants in North Charleston and Everett, Wash.
Work to meet the new output rate, including hiring hundreds of workers and getting suppliers up to speed, began last year and accelerated in January.
"We're well into the 14-a-month rate step," Greg Smith, Boeing's chief financial officer, told analysts during an earnings call.
The higher rate is one reason the planemaker expects earnings in 2019 will beat the record financial performance turned in last year, when the company cracked the $100 billion revenue threshold for first time.
The profit margin on commercial planes is expected to jump from 13.6 percent to at least 14.5 percent as Boeing delivers between 895 and 905 jets — including roughly 160 Dreamliners — in 2019.
Smith said rate increases, lower costs from suppliers and continued cost savings on the 787 as well as a higher production rate for single-aisle 737s built on the West Coast will contribute to the improved profit margins.
Sales of more 787-10 models, the largest and most expensive Dreamliner variant, will also bring in more cash. That's because the "Dash 10" — which is built exclusively in North Charleston — is a nearly identical simple stretch of the 787-9, so it's production is similar but its list price is nearly $45 million higher.
"They've done a great job in delivering on their commitments to shareholders and to customers, and now we're moving into the next phase of moving up to 14 per month and continuing to capture productivity gains," Smith said of crews in North Charleston and Everett.
Boeing CEO Dennis Muilenburg said "it's very clear" that the 787 "is generating value for our customers and winning in the marketplace."
Meanwhile, Boeing is getting closer to making a decision on a new airplane program — nicknamed the 797 — that would fill a niche for customers wanting a mid-range jet. The size of the new model would fit somewhere between the company's current single-aisle and wide-body offerings.
Muilenburg said an initial decision will be made later this year and, depending on the reaction from customers, a program launch date could be announced in 2020, with the first planes produced five years later.
"It's clear that there's a market need but we're working on the details of the business case," Muilenburg said, adding the company has talked with at least 60 potential customers. "We're going to be very disciplined on how we do that."
While there has been speculation that Boeing might produce the new plane at its North Charleston campus, where 450 acres are available for expansion, most analysts believe the jet would be built in the Seattle area.