Boeing slashing 737 deliveries on quality issue
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Boeing is reducing its 737 deliveries in 2023 after spotting a quality issue involving the aircraft’s pressure bulkhead on certain models.
While the aerospace and defense manufacturer said on Wednesday that the issue was not an immediate risk to flight safety and the in-service fleet can continue operating, the temporary delivery snag has forced Boeing to retract its plan to deliver as many as 450 jets this year to just 375 to 400.
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Still, shares rose as Boeing CEO Dave Calhoun commented on demand.
"We are focused on driving stability in our supply chain and improving operational performance as we steadily increase production rates to meet strong demand.," Boeing CEO Dave Calhoun said.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| BA | THE BOEING CO. | 156.54 | +1.10 | +0.71% |
Despite the dip in deliveries, Boeing said suppliers will maintain production rate increases and bump up final assembly transition to 38 per month by year-end. In 2025 and 2026, the company will spike production levels to 50 per month, with estimated costs to complete the rework included in third quarter results, Boeing said.
An experimental Boeing 737 Max 10 jet airliner readies for its flying display in front of Boeing workers at the Farnborough Airshow, on July 20, 2022, at Farnborough, England. (Richard Baker / In Pictures via Getty Images / Getty Images)
Meanwhile, the 787 program will also move production goals to five per month and will jump to 10 per month between 2025 and 2026, while delivering 70 to 80 planes this year.
Dave Calhoun, chief executive officer of Boeing Co., speaks during a panel session at the Qatar Economic Forum in Doha, Qatar, on Tuesday, May 23, 2023. The third Qatar Economic Forum will shine a light on the rising south-to-south economy and the ne (Photographer: Christopher Pike/Bloomberg via Getty Images)
Boeing also reported third quarter earnings on Wednesday, generating $18 billion in revenue and posting a loss of $3.26 per share.
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A Boeing 787-10 Dreamliner taxis past the Final Assembly Building at Boeing South Carolina in North Charleston, South Carolina, on March 31, 2017. (REUTERS/Randall Hill/File Photo / Reuters)
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Boeing shares have lost over 3% this year.
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