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Boeing Tells Suppliers It is Slowing 737 Output Goal by 3 Months

Editor

Laila Afifa

15 June 2024 13:00 WIB

TEMPO.CO, JakartaBoeing (BA.N) has told suppliers it is delaying a key production milestone for its 737 jet family by three months, two industry sources said, as it continues to struggle with a crisis that is hurting output.

A new Boeing supplier schedule communicated to the industry calls for 737 output to reach 42 a month in September, compared with a previous target of reaching that output in June, the sources said. Boeing was not immediately available for comment.

Boeing's jet production has slowed sharply in the face of increased scrutiny from regulators, airlines and lawmakers following a January incident when a door plug blew off an Alaska Airlines (ALK.N) jetliner while in mid-air.

Boeing's supplier master schedule lays out expectations for when suppliers should be at a given production rate. Analysts say it does not necessarily reflect actual production which has been lagging due to a mixture of regulatory scrutiny and supply constraints.

However, Boeing’s decision to push back the target is an indication that it believes supply pressures are not easing. Rival Airbus (AIR.PA) the world's largest planemaker, is also bracing for increased near-term disruption amid shortages of parts and labor, Reuters reported last month.

The new supplier schedule calls for output to reach 47 a month in March 2025, compared with January of that same year. Output would reach 52 a month in September 2025, compared with June.

The consumer continues to be depressed about the U.S. economy, and there's still a disconnect between the U.S. consumer and their feelings about the economy and their spending.

Boeing shares fell 2.2% in Friday trading.

The company last month said it would burn rather than generate cash in 2024 and deliveries will not increase in the second quarter as originally expected.

REUTERS

Editor's Choice: Boeing Expresses Interest to Support Indonesia's Aerospace Industry

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