WASHINGTON: Boeing has delayed plans for its supply chain to ramp up production of its bestselling 737 jetliner, according to a presentation, as the company deals with regulatory curbs on its output and increased scrutiny following a mid-air blowout on a MAX 9 in January.
The US Federal Aviation Administration in late January barred Boeing from increasing production of the 737 MAX following the Jan 5 accident, and could prove a setback in the future as the US planemaker struggles to raise production levels to compete with its European rival Airbus.
According to Boeing's latest 737 supplier master schedule, the supply chain was previously told to inrease production rates from the equivalent of 38 aircaft a month to 42 in February this year which is now delayed to June.
Boeing will push back a rate increase from 47 jets a month from August 2024 to January 2025.
A move to 52 737s per month scheduled for February 2025 is now estimated to take place in June 2025, a timeline that would allow Boeing to stay on track for its goal of producing 50 jets per month in 2025-2026, a critical enabler for achieving $10 billion in free cash flow in the same timeframe.
Boeing won't hit its pre-pandemic goal of 57 aircraft per month until February 2026, from a previous estimate for August 2025.
The supplier master schedule lays out the expectation for when suppliers should be at a given production rate. While it usually predates Boeing's own shift to a new rate, it is an important signal of confidence for the supply chain, who rely on it for planning future workforce and equipment investments.
It also comes as Boeing is in talks to buy back its former subsidary Spirit AeroSystems, the Wall Street Journal reported Friday, as the Wichita-based company has also dealt with substantial production delays and hits to its balance sheet.
Boeing leaders had indicated the supply chain would keep ramping up according to previous plans issued in December, but acknowledged there could be future changes due to an ongoing FAA audit of Boeing's production system. — Reuters
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