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Boeing Revises 737 Jet Production Timeline Amid Industry Hurdles

Published Dec 07, 2023 14:57 Updated Dec 07, 2023 15:16
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© Reuters. Boeing Revises 737 Jet Production Timeline Amid Industry Hurdles
 
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Quiver Quantitative - Boeing (NYSE:BA) has recently informed its suppliers of a revised production timeline for its flagship 737 narrowbody jetliner, indicating a slower ramp-up than previously planned. The American aerospace giant now aims to reach a production rate of 42 jets per month by February 2024, a two-month delay from the original schedule. This adjustment reflects the ongoing challenges both Boeing and its European competitor Airbus face, including supply chain bottlenecks and production hiccups, in their efforts to meet the increasing demand for their popular single-aisle aircraft models.

The revised schedule not only delays the initial production increase but also pushes back subsequent rate hikes. Boeing's new plan is to achieve a production rate of 47.2 jets per month by August 2024 and 52.5 jets per month by February 2025, both delayed from their original targets. Ultimately, Boeing now expects to reach its pre-pandemic production goal of 57.7 aircraft per month by October 2025, three months behind the initial July 2025 target. This news led to a 1.3% drop in Boeing's shares in midday trading following Reuters' report on the updated schedule.

Boeing, while not commenting directly on the new master schedule, reiterated its intention to increase production to 50 airplanes per month in the 2025/2026 timeframe. The company's commercial airplanes division head, Stan Deal, had previously indicated in a Bloomberg TV interview the possibility of achieving a 42 jets per month rate by the end of 2023. However, a supplier error discovered in August necessitated additional inspections, further delaying the production ramp-up. Boeing CEO Dave Calhoun had affirmed in October the company's intention to reach 38 planes per month by year's end.

The revision in Boeing's supplier master schedule, while not unusual in the aerospace industry, is a critical indicator for smaller companies in the supply chain, allowing them to align their material and workforce planning accordingly. Calhoun has expressed confidence in Boeing's capacity to produce 60 737s monthly, contingent on the supply chain's ability to support these planned rate increases. Before the 2019 grounding of the 737 MAX, Boeing was producing these aircraft at a rate of 52 jets per month, underscoring the company's ambition to return to and exceed pre-crisis production levels.

This article was originally published on Quiver Quantitative

Boeing Revises 737 Jet Production Timeline Amid Industry Hurdles
 

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