PPRuNe Forums - View Single Post - Last C-17 to go to India...........
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Old 30th Jun 2017, 01:34
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tdracer
 
Join Date: Jul 2013
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well the line is paid for so you have no major investment and you price each unit to reflect the cost of production + profit
Harry, it takes a boatload of money to keep a large production line open. Not only are you talking a huge factory - with all the associated costs such as lights, taxes, etc. - there are all the costs the thousands of vendors have to keep the capability going. Vendors are promised a minimum production rate - if it drops below that they are under no obligation to maintain their capability. Bottom line, it's nearly impossible to build airplanes profitably at much less than one/month. When Boeing slowed the 747-8 production to six/year, they took a billion dollar write-off - and the only reason they are bothering to keep the line open is they think the 747-8F still has a promising future (there are over a hundred 747-400F and -400BCFs (not to mention numerous 747 classics) out there that are north of 100,000 hours, and they can't keep flying them forever). Boeing claims they can build 747s at 1/month and make money, but not at 1/2 per month while Airbus is struggling to make the A380 cash flow positive at 1/month while they try to drum up new orders...
Boeing made the decision to build the last ten C-17s as white tails - betting a few billion dollars that they'd be able to sell them eventually. They did, but it took over three years to move all 10 aircraft.
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