CEO Dave Calhoun emphasized during a Q1 briefing that Boeing is collaborating effectively with fuselage supplier Spirit AeroSystems, and although near-term production and deliveries will be reduced, they will rebound in the coming months.
Calhoun mentioned that their teams have been diligently working to inspect the defective planes, and the problem has been pinpointed to two specific fittings. He acknowledged that the timing of these delivery delays would affect some customers' summer capacities and expressed regret for the inconvenience.
The manufacturing issue is described as a complex defect that is challenging to avoid. Calhoun shared that an employee noticed the problematic procedure and raised concerns, prompting the company to encourage everyone to speak up about potential issues. Boeing delivered 113 737s in the first quarter, including 53 in March.
CFO Brian West stated that the company has started repairing several aircraft and anticipates reduced deliveries in April and Q2. However, Boeing aims to maintain a monthly delivery average of 30 aircraft for the first half and increase to 40 aircraft per month in the second half. This will allow the manufacturer to maintain its 2023 forecast of 400-450 737s.
West explained that the ultimate performance hinges on the pace of fuselage recovery, with 75% of the 225 737 MAX jets in inventory requiring rework. The number of airframes in inventory will likely grow in Q2, but Boeing anticipates most of these planes will be delivered by the end of 2024.
Boeing is supporting Spirit AeroSystems with manufacturing and engineering resources, along with a cash advance. The company expects to receive "clean" fuselages from Spirit soon. The repair timeframe for affected aircraft varies, but it will not derail Boeing's plan to handle the 225 inventoried MAX planes.
Boeing considers the rework issue a short-term setback and aims to resume normal production levels within months, targeting a monthly 737 output of 38 aircraft this year. Calhoun emphasized prioritizing stability and not pushing the system too quickly, pausing production when defects are reported.
