Boeing (BOE, Washington National) has confirmed it projects a slower increase in the production and delivery of new B787 widebodies due to shortages of key parts from suppliers.
Responding to a query from ch-aviation, the manufacturer confirmed reports by Reuters and CNBC, citing an internal memo from Scott Stocker, vice president and general manager of the B787 programme and Boeing South Carolina site leader. He told staff members: "We continue to manage through supplier shortages on a few key parts. To that end, we have shared with our customers that we expect a slower increase in our rate of production and deliveries."
According to Boeing's first quarter results released on April 24, its commercial aircraft division delivered thirteen B787s in the three months to March 31, 2024, up from 11 in the same period in 2023. However, B737 MAX deliveries slowed to 67 in the first quarter compared to 113 in the same period last year. The only other type delivered were three B767s. The lower delivery volume is reflected in Boeing's first quarter results of USD16.6 billion in revenue, operating cash flow of USD3.4 billion, and free cash flow of USD3.9 billion.
"Our first quarter results reflect the immediate actions we've taken to slow down 737 production to drive improvements in quality," commented President and CEO Dave Calhoun. "We will take the time necessary to strengthen our quality and safety management systems, and this work will position us for a stronger and more stable future."
The adjustment comes amid ongoing challenges for Boeing including the aftermath of a B737-9 incident on January 5 when a door plug blew out of Alaska Airlines Flight 1282 in mid-flight due to missing bolts, prompting the grounding of 171 B737-9s. Deliveries of B787s are backlogged after deliveries were suspended for two years in 2020 over manufacturing defects.
First quarter revenue for Commercial Airplanes, Boeing's commercial aircraft segment, stood at USD4.7 billion, an operating margin of 24.6%, reflecting lower B737 deliveries and the -9 grounding. During the quarter, B737 production slowed below 38 per month to incorporate improvements to the quality management system and reduce travelled work within its factory and supply chain. Boeing said it was implementing a comprehensive action plan to address feedback from a damning Federal Aviation Administration (FAA) audit of the B737 production.
Meanwhile, Boeing received 125 net orders in the first quarter for commercial aircraft, including eight-five B737-10s for American Airlines and twenty-eight B777X for customers including Ethiopian Airlines. It delivered 83 aircraft during the quarter, with a backlog of more than 5,600 aircraft valued at USD448 billion.
