As the coronavirus pandemic continues to restrict air travel and plane deliveries, jet parking is at a premium at Boeing Co.'s 787 assembly campus in North Charleston.
The aerospace giant won't say how many Dreamliners are stacked up at its plant off International Drive, but well more than a dozen are parked along the flight line and jammed into spaces near the paint hangar, factory buildings — wherever they will fit.
One Vietnam Airlines jet recently had it tail jutted out toward passing traffic. Another 787 for Norwegian Air, featuring a photo of Irish aviator James Fitzmaurice on the tail fin, is backed up on the grass against a barbed wire fence protecting the factory grounds.
Dreamliner jets are parked side-by-side along the flight line at Boeing Co.'s 787 assembly campus in North Charleston. David Wren/Staff
The space crunch isn't likely to ease any time soon, analysts say, because airlines aren't buying or taking delivery of wide-body jets made for international travel when passenger counts have fallen as much as 96 percent in the months after COVID-19 began spreading across the U.S. While some air travel has rebounded, several foreign countries — including those in the European Union — have banned Americans from visiting.
Meanwhile, Boeing's Dreamliner factories in North Charleston and Everett, Wash., continue to build planes. Seth Seifman, an analyst with JPMorgan, said in a note to investors last week that Dreamliner production has likely recovered to 10 jets a month — split between the two factories — following plant shutdowns due to COVID-19 earlier this year.
"This is well above what the market needs, which should result in a growing surplus of 787s at Boeing," Seifman said.
Uresh Sheth, an analyst who tracks Dreamliner production, told Bloomberg News an estimated 50 Dreamliners are parked at the two assembly sites — more than double the usual number. Sheth added that some 787s are even being flown to a desert storage lot in Victorville, Calif.
Boeing spokeswoman Libba Holland said the company is working "closely with our customers to meet their dynamic fleet needs. As a result, we are placing some 787s in temporary storage ahead of delivery to our customers. We do not disclose the details of these conversations with our customers."
Boeing delivered 30 Dreamliners during the first half of this year, but just three were picked up by customers in the May through June period.
To clear the backlong, Seifman of JPMorgan said that Boeing would have to deliver more than 10 Dreamliners a month through next year — a daunting goal considering "long-range travel may still be under pressure."
According to Bloomberg, Boeing had been counting on Dreamliner sales to offset $20 billion in costs related to a pair of 737 Max crashes in 2019 and the plane's subsequent and ongoing worldwide grounding. Richard Aboulafia, an aviation analyst with Teal Group, told the news service the Dreamliner once looked like a financial savior but "now looks like a nothingburger."
Boeing Co. is parking its Dreamliner jets, like this one for Norwegian Air, in every available spot at the aerospace giant's North Charleston assembly campus. David Wren/Staff
Greg Smith, Boeing's top financial officer, said the aerospace giant may adjust future production rates to balance supply with demand, adding "we continue to closely monitor the commercial marketplace by staying very engaged with our customers around the globe to fully understand short-term and long-term requirements."
Boeing, which announces its second-quarter earnings next week, is counting on the "diversity of our portfolio including our government services, defense and space programs (to) continue to provide some stability as we navigate through the pandemic and rebuild stronger on the other side," Smith said.
Seifman has issued a "neutral" rating on Boeing's stock, with a price target of $158 by year's end — roughly $20 per share lower than its current value. While there are too many moving pieces to judge Boeing's long-term financial health, Seifman said the short-term uncertainty warrants a cautious outlook.
