Parts shortage affects Boeing 737 MAX production By Reuters
© Reuters. FILE PHOTO: A Boeing 737 Max jet airliner model is displayed at the China International Aviation and Aerospace Show, or Airshow China, in Zhuhai, Guangdong province, China September 28, 2021. REUTERS/ Aly Song
By Eric M. Johnson and Aishwarya Nair
SEATTLE (Reuters) – Boeing Co said on Wednesday that supply chain disruptions had slowed production and deliveries of its 737 MAX narrow-body jet in recent weeks, but it does not see its overall plan for the year be disturbed.
The US aircraft maker also said China is close to allowing the 737 MAX to return to service, but progress with regulators and customers has been held up by strict COVID protocols, not more trade tensions. wide between Washington and Beijing.
Boeing (NYSE:) Chief Financial Officer Brian West told a Goldman Sachs (NYSE:) conference that he was dealing with shortages from several suppliers of a particular wiring connector, although overall, the factory is ready to produce 31 jets per month to plan.
“It’s a reflection of a crazy supply chain world we live in right now,” West said. “It’s quite localized and isolated, but we have options and we’re working hard on them.”
“These issues are usually resolved in a short time, then we catch up and move on,” he added.
The 35 planes Boeing delivered to customers in April — 28 of which were its best-selling 737 MAX — fell on the 41 jets delivered in March. Boeing separately expressed doubts in late April that it would meet a delivery target of 500 aircraft for the 737 MAX this year. [L2N2X12RW]
Delivering a bloated inventory of 737 MAX and 787 Dreamliners is critical to Boeing’s ability to emerge from the pandemic and overlapping safety crisis caused by the grounding of its best-selling model after fatal crashes in 2018 and 2019.
China, one of the world’s largest aviation markets, resisted allowing the 737 MAX to resume commercial service. Boeing sold a quarter of its jets to China before the grounding and the years-long tariff war.
“With China, without China, there’s robust demand,” West said.
“We always want to make sure that we are very sensitive to this part of the world,” he added. But when Boeing ramps up production, “it will depend on our confidence in our supply chain, not demand signals.”
Meanwhile, Boeing is battling certification and industrial headaches in its jetliner portfolio. Production defects halted 787 Dreamliner deliveries for a year, reducing airline capacity. He is working separately to clear more than 300 737 MAX jets parked since the crisis.
Lockdowns have hurt cash flow while debt has soared, raising questions from customers and analysts in recent days about whether the biggest US exporter faces the prospect of a downgrade. his credit rating.
West said Boeing didn’t need to tap lines of credit or raise capital immediately, but said “all options are on the table,” such as a longer-term capital raise as the deliveries and production rebound.
On the 787, West said U.S. aviation safety regulators were reviewing a full set of certification documents submitted by Boeing as the planner prepared to deliver the first jets — but he stopped short of predicting when the deliveries would be. would resume.
Industry sources say 787 deliveries were likely still weeks away.
“I can’t give you a date, the FAA decides, but there continues to be good momentum and people are working hard,” West said.