Boeing approves one more year of C-17 production on anticipated demand

[Abingdonboy]

Boeing has started building as many as 12 more C-17 airlifters in anticipation of signing new orders from international customers, possibly extending the Long Beach, California production line by more than a year.

The company's second quarter earnings report filed with the US Securities and Exchange Commission notes that as of 30 June $620 million is obligated in inventory and potential termination liabilities for the next batch of aircraft.

The note confirms that Boeing leadership decided in the second quarter to continue building C-17s beyond the aircraft already on contract for delivery through September of next year.

"As in the past, Boeing is investing company funds on long-lead components to protect the continued affordable production of C-17 aircraft in anticipation of additional orders from international customers," the company says in a statement to Flightglobal.

Boeing has confirmed orders to continue building C-17s into the third quarter of 2014. If it builds all 12 C-17 as unsold "white tails", production could continue into the fourth quarter of 2015, based on current output of 10 per year.

Boeing says it is in discussions with a range of new and existing customers, although previous reports have linked the C-17 to additional orders from India and Australia and possible new orders from Saudi Arabia and Singapore.

The C-17's supply chain is already starting to build the unclaimed hulls, as production system requires an 18-month lead time for early parts and materials.

David Kornblatt, chief financial officer and executive vice president of Triumph Group, which owns C-17 supplier Vought, said in a recent teleconference with analysts that production has already begun on the next batch of aircraft.

"Now we've been given authorization to go ahead and build airplanes," Kornblatt says. "What we hear from [Boeing] is that they're confident that the next [block of 10 aircraft] is going to get sold."

Boeing approves one more year of C-17 production on anticipated demand

 

[Capt.Popeye]

Interesting News!!!

Batch 1; 10 aircraft,
Batch 2: 6 aircraft,
Batch 3: 6 aircraft

Total: 22 aircraft.
Il-76s slowly and progressively retired.

From reading the "spinach leaves".
But that's the likely final tote.

 

[indian_foxhound]

wah wah... what a news

 

[Abingdonboy]

Interesting News!!!

Batch 1; 10 aircraft,
Batch 2: 6 aircraft,
Batch 3: 6 aircraft

Total: 22 aircraft.
Il-76s slowly and progressively retired.

From reading the "spinach leaves".
But that's the likely final tote.

I've always said the final number of C-17s in IAF service was going to be anywhere between 22-30. We'll just have to see I guess.



btw @Capt.Popeye sir, congrats on becoming "Elite" didn't that!

 

[Iggy]

Just a small doubt, is this closing down of C-17 will affect the availability of spare parts in long term?

 

[Capt.Popeye]

I've always said the final number of C-17s in IAF service was going to be anywhere between 22-30. We'll just have to see I guess.



btw @Capt.Popeye sir, congrats on becoming "Elite" didn't that!

Thanks for the Good Wishes; AB.
My own guess is about 22. And that's not from my reading of "spinach leaves"
That number will make do. Remember that the MRTTs will have air-lift capability too, albeit as a secondary function.

Just a small doubt, is this closing down of C-17 will affect the availability of spare parts in long term?

Nope. Even the USAF will need to keep their C-17 fleet in the air. So no worries on that account.

 

[Abingdonboy]

Just a small doubt, is this closing down of C-17 will affect the availability of spare parts in long term?

NO WAY! Looking purely from a business perspective- Boeing would be shutting out a major revenue stream if they did that. Not to mention the serious legal repercussions if Boeing went down this road- most C-17 customers have signed long-term logistics and spares contracts. The IAF for instance has signed a 10 year “performance based logistics” contract that locks Boeing in to ensuring some 85% of the IAF's C-17 fleet is available at any one time.


With 250+ C-17s flying around for many decades to come, the availability of spares won't be an issue.

 

[Nishan_101]

Interesting News!!!

Batch 1; 10 aircraft,
Batch 2: 6 aircraft,
Batch 3: 6 aircraft

Total: 22 aircraft.
Il-76s slowly and progressively retired.

From reading the "spinach leaves".
But that's the likely final tote.

I am sure that India will order about 20 C-17s in coming time or they might be in discussions also 100+ Chinooks and Apaches too...