The 787 Dreamliner has been billed as Boeing’s “game changing” plane, with fuel efficiency that would help Boeing win its competition with Airbus. Now Wall Street is starting to give up on a profit for the plane.
A chorus of financial analysts has been saying that Boeing cannot recover its losses from building the 787.
Now the financial press is reporting that Bank of America Merrill Lynch is advising Boeing stockholders to sell.
The wide-body jet was designed in Everett but suffered years of production delays. Boeing has sunk $29 billion into developing the plane. The company says it can pay that off by 2022.
Scott Hamilton, a private aerospace consultant, says he doubts that is possible.
Hamilton: “I’ve been thinking for quite some time that Boeing will have to take a charge on the airplane.”
And taking a loss on the 787 line would hit Boeing’s stock price.
Boeing has been saying everything is fine. It’s been going after suppliers to reduce costs, seeking tax breaks and slashing labor costs. All to fight fierce competition from Airbus.
Hamilton: “It’s all been part of a big game but the biggest nut that they have yet to tackle is that deferred production cost. And many of us believe that that day of reckoning is not too far away.”
Hamilton says if Boeing took the loss, it would gain pricing flexibility in its sales war with Airbus.
Boeing’s next earnings report is coming next Wednesday.