Troubled Boeing delivers only 25 of the profit-making 737 Max planes in January

The company has been scrambling to explain and strengthen its safety procedures after last month's mid-air cabin blowout

Tue, 13 Feb, 2024 - 17:25

Boeing chief financial officer Brian West said the troubled company will move to a steady 737 production rate of 38 aircraft per month in the second half of 2024 after slowing the line following last month's mid-air cabin blowout on a 737 Max 9.

Previously, Boeing said it was "cycling" at a rate of 38 narrow-body 737s a month, but Mr West said at an investor conference that the planemaker is having to periodically pause the line as it focuses on quality in the wake of the incident.

"We have to acknowledge that we have lots of things to focus on in terms of keeping the airplanes in position longer so that we can incorporate all the learnings that we're finding, and that's just fine," said Mr West, adding that it will be up to the US Federal Aviation Administration to dictate future rate increases.

Boeing also said it delivered 27 airplanes in January, which was down 29% from the same month last year as regulators, lawmakers, and customers pressured the planemaker following the Max 9 blowout. Deliveries of the profit-making 737 Max fell to just 25 aircraft after two solid months where Boeing delivered in excess of 40 Maxs. While deliveries tend to be slower in January, Boeing delivered 38 airplanes, including 35 Maxs, in January 2023.

The US planemaker booked three gross orders, its lowest total since 2019, after a blockbuster December. It said customers it did not identify cancelled orders for two 737 Max while Spanish carrier Air Europa cancelled an order for one 787 Dreamliner.

Boeing's European rival Airbus delivered 30 jets in January and reported 31 new orders.

Boeing has been scrambling to explain and strengthen its safety procedures after a January 5 accident involving a door plug on a brand new Alaska Airlines Max 9 that became detached during flight. In response, the US Federal Aviation Administration grounded the Max 9 for several weeks last month and has capped Boeing's production of the Max while it conducts an audit of the planemaker's manufacturing process.

Quality glitch

This month, Boeing supplier Spirit Aerosystems discovered a new quality glitch. Spirit incorrectly drilled holes on the window frames of some 737s, potentially slowing deliveries of about 50 planes.

Aside from the 737 Max deliveries, Boeing delivered one 787 Dreamliner and one widebody 767, which be modified into a KC-46 tanker for the US air force. Boeing's backlog decreased from 5,626 to 5,599 aircraft as of the end of last month. It has a total of 6,189 unfilled orders when accounting adjustments are not considered.

Airlines such as Ryanair which have placed large orders for the yet-to-be-certified Max 10 planes for delivery in less than three years are watching the latest crisis for Boeing closely.

Boeing chief executive Dave Calhoun said last month on an earnings call that the company would not issue aircraft delivery targets for 2024 as it works through the current crisis.

"We will simply focus on every next airplane and ensuring we meet all the standards that we have, all the standards that our regulator has and that our customers demand," he said.