Boeing 787 Dreamliner Production Surges 55%

UBS has recently released a report indicating that Boeing's 787 Dreamliner production is on a steady upward trajectory. The report, based on data tracked by UBS's Evidence Lab, highlights a close correlation between the number of Boeing 747 Dreamlifter flights and the production rate of the 787 Dreamliner. These modified 747 cargo planes are used to transport structural components of the 787 Dreamliner to Boeing's assembly plant in Charleston, USA.

According to the report, the number of 747 Dreamlifter flights increased by 55% in the four weeks leading up to May 14 compared to the same period last year. This increase suggests that the current production rate of the 787 Dreamliner is approximately 5.9 aircraft per month, up from 5.7 aircraft per month a month ago. UBS notes that while the number of 747 Dreamlifter flights has fluctuated over the past two years, it has generally been higher than the production rate of the 787 Dreamliner, indicating an increase in inventory. The current flight frequency of approximately 6 times per month suggests that Boeing is on track to meet UBS's forecast of a production rate of 6 aircraft per month in the second half of 2025, and may even reach Boeing's target of 7 aircraft per month by the end of this year. Additionally, the report indicates that tariff issues do not appear to be affecting the flight schedule of the 747 Dreamlifter.

Following supply chain disruptions that caused production delays, Boeing is working to restore its 787 Dreamliner production. UBS expects the production rate to stabilize at 5 aircraft per month in the first half of 2025, increase to 6 aircraft per month in the second half of the year, and reach 10 aircraft per month by the second half of 2027. Regarding the latest delivery status of the 787 Dreamliner, UBS estimates that Boeing delivered 5 aircraft in May, with 5 of those being newly produced and 3 coming from inventory. UBS expects Boeing's 787 Dreamliner inventory to decrease to slightly above 40 aircraft by the end of this year, down from 54 aircraft at the end of the first quarter of 2024. During the April earnings call, Boeing stated that the production rate of the 787 Dreamliner is stable at 5 aircraft per month, with a target of 7 aircraft per month by the end of the year.

UBS maintains a "buy" rating on Boeing's stock with a 12-month target price of $226, representing a nearly 12% increase from Boeing's closing price from the previous week. The steady increase in 787 Dreamliner production is a positive sign for the aerospace industry, indicating a growing demand for wide-body aircraft and a recovery from the impacts of the COVID-19 pandemic. Boeing's efforts to improve its manufacturing processes and supply chain management have resulted in enhanced efficiency and quality control, enabling the company to meet the growing demand for its aircraft. The 787 Dreamliner's advanced features and fuel efficiency make it an attractive option for airlines looking to reduce their operating costs and carbon footprint. The projected increase in production is expected to benefit airlines, create jobs, and stimulate economic growth in the regions where Boeing operates, as well as benefit suppliers and other stakeholders in the aerospace industry.