Dive Brief:
- Boeing aims to increase annual production of its 737 aircraft to 38 planes per month as the company continues to prioritize stability across its supply chain and manufacturing segments, according to a July 26 earnings call.
- The aerospace company's goal is to reach 50 monthly 737 aircraft deliveries by 2025-2026, EVP and CFO Brian West said during the call.
- “With demand strong, we still find ourselves in a supply-constrained environment,” West said. “And our focus continues to be on execution, both within our factories and the supply chain as we steadily increase production.”
Dive Insight:
Boeing has been taking steps to recover its production levels after years of supply issues. Earlier this year, supplier Spirit AeroSystems notified Boeing of a quality issue on the fuselage section of certain 737 aircraft, which further pushed back deliveries.
In response, Boeing sent Spirit AeroSystems manufacturing and engineering resources to aid in the recovery and repair process. The quality escape that spurred work stoppage has since then been “contained or will be remedied” as Boeing exits the third quarter, Dave Calhoun, president and CEO, told analysts.
“In regards to the Spirit fitting issue that we discussed last quarter, in May, we resumed deliveries of rework airplanes and also began producing newly built airplanes meeting our specifications,” West said.
In addition to 737 production, which includes 737-7 and 737-10 aircraft, easing supply chain strains enabled Boeing to make progress across its 777X and 777-8F development programs.
Boeing delivered 136 commercial aircraft in total last quarter, 49 of which were in June, West said. Deliveries include 20 787s and 103 737s, and the aerospace company believes it is on “the right path to reach our 737 and 787 delivery guidance for the year.”
“The supply chain still feels like it’s getting better, a little more stable, a little more coordinated. And we got to keep executing,” West told analysts.
The aerospace industry has had its fair share of issues, despite easing supply chain conditions. Bankrupt Incora is trying to force supplier Appli-Tec to ship parts the company previously ordered. Spirit AeroSystems has also faced issues, including labor attrition which spurred shortages and other challenges.
