Boeing faces space crunch from undelivered 787 jets

Boeing Co is running out of space to stash newly built 787 Dreamliners, with jetliners seemingly tucked onto every available patch of pavement on airfields near its factories in Washington and South Carolina.

Dozens of the planes are sitting on the company's premises, according to people familiar with the situation. Uresh Sheth, a much-followed blogger who meticulously tracks the Dreamliners rolling through Boeing's factories, puts the total somewhere above 50. That's more than double the number of jets typically awaiting customers along Boeing's flight lines.

Brand-new widebodies are lined up on a closed off runway at the airport that abuts

Boeing's hulking plant north of Seattle. In North Charleston, 787s are tucked around the delivery centre and a paint hangar. The US planemaker has even started sending aircraft to be stored in a desert lot in Victorville, California, according to Sheth.

After last year's global grounding of 737 Max jets, the company had so many of them on hand that it commandeered an employee parking lot to store surplus aircraft. Now, as it finally starts to emerge from that crisis, another critical source of cash—the marquee 787—is under pressure.

Boeing had relied on the widebody jet, produced in record numbers, to help bankroll the $20 billion in costs it has rung up since the Max was banned from commercial flight in March 2019 following two fatal crashes. But as Covid-19 sapped consumer interest in long-range travel this year, the tally of undelivered Dreamliners has stacked up and created a new financial drag as regulators move closer to clearing the 737's return.

"The next couple of years are just going to be very hard for this airplane," George Ferguson, an analyst with Bloomberg Intelligence, said of the 787 Dreamliner.

Demand for the twin-aisle 787, Boeing's 777 and Airbus's A350 and A330neo has been especially hard hit as cash-strapped airlines slow or cancel aircraft purchases. Some would-be buyers don't want to send pilots to claim aircraft in the US, where the pandemic is raging. When they are able to start growing fleets, airlines are expected to initially focus on smaller planes for domestic flights before adding larger aircraft for continenthopping trips.

Boeing also faces a "capacity hangover" after pushing Dreamliner production to a 14jet monthly pace last year—a record for wide-body aircraft— in a market that was already glutted with aircraft, said Richard Aboulafia, an analyst with Teal Group.

"It was one of the few levers they could pull to bring in more cash during what seemed like a crisis, and now looks like a nothingburger," Aboulafia said of Boeing's response to the Max grounding. That scandal has been eclipsed by the unprecedented aviation collapse brought on by Covid-19. "No twin-aisle had ever been built at 14-amonth for a very good reason." Boeing declined to comment specifically on the number of

787s in its inventory or production plans, citing a quiet period.