To pay for a massive new development programme - its design and its industrialisation - Boeing must make its current clean-sheet 787 profitable, before it sets out on the next. Both UBS Investment Research and Bernstein recently published reports raising questions about the pace of achieving profitability on the 787, recognising the contractually established supplier costs coupled with the low locked-in aircraft sale price over more than 800 aircraft. David Strauss, of UBS, predicts "flat to progressively worse 787 cashflow over the next several years" as the production system comes down the learning curve, coupled with prices that make the 787, said Doug Harned of Berstein Research, a "victim of its own success. With 787 production sold out until 2019, pricing is largely fixed at prices we believe were set too low in the beginning".
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