How Much Does a Boeing 787-10 Cost?

Last Wednesday, Boeing Co. (NYSE: BA) tested a new Rolls-Royce engine that is destined to power the company’s largest Dreamliner, the 787-10. The new engines were mounted on a 787-8 and lifted the plane to an altitude of 43,000 feet at speeds approaching Mach 0.85 (Mach 1 is the speed of sound).

And while the flight test was going on, Boeing engineers in South Carolina were preparing the assembly line to build the first 787-10. That aircraft is expected to make its first test flight sometime next year, and the first customer delivery (to Singapore Airlines) is scheduled for 2018.

At a list price of $306.1 million, the 787-10 is the most expensive in the Dreamliner family. In a two-class configuration the plane carries 330 passengers on flights of up to 6,430 nautical miles (about 7,400 statute miles).

Boeing has taken just 154 orders for the plane, and its backlog for the entire Dreamliner family is 721 aircraft. Through November, Boeing has taken orders for 1,210 787s and delivered 489 of the 787-8 (320 aircraft) and 787-9 (169 aircraft).

[nativounit]

The slowdown in the market for dual-aisle jets has led to increased competition between Boeing and Airbus for that piece of the market. Low fuel prices combined with a large number of the big planes coming off leases have glutted the market for older planes that can be purchased for far less.

A 2005 777-300ER seating 316 passengers is available for an asking price of $82.5 million through Controller. A new 777-300ER is listed for $339.6 million by Boeing. Even at a 50% discount to the list price, a new plane is about double the cost.

Boeing has other problems as well. CEO Dennis Muilenburg got crossways with President-Elect Donald Trump over the U.S. Export-Import Bank, apparently causing Trump to threaten to cancel an order for two new 747-8s to serve as Air Force One.

For Boeing, meeting its delivery schedule for the 787-10 is far more important than a couple of 747s. But having the president-elect paint a target on an icon like Air Force One is, as they say, bad optics.

Boeing’s stock is up more than 12% year over year and has gained nearly 6% since the November election. Shares closed at $156.49 on Friday, up 1.1% on the day, after posting a new 52-week high of $156.88. The stock’s 52-week low is $102.10, and the consensus 12-month price target is $152.61.

[wallst_email_signup]