Boeing CEO Kelly Ortberg has flagged the American aviation giant’s “longer than expected” efforts to stabilise its 737 MAX production rate at the pre-decided target of 47 jets per month.
Ortberg also downplayed expectations that China would announce a large jetliner order during the upcoming political summit between Donald Trump and Xi Jinping.
Boeing is relying on the increasing output of its popular single-aisle jetliner as the company aims for a steady financial recovery after years of crises that have left it with nearly USD 26 billion in net debt and a tarnished safety reputation.
“Boeing has not been able to make 737 wings fast enough to consistently feed the higher rate of 47 jets a month,” Ortberg said.
He further stressed the need of the American aviation giant Boeing to speed up its wing production, along with the certification of the new 737 production line in Everett, Washington, to raise output to 52 jets a month next year.
Ortberg expressed confidence in the supply chain’s ability to manage the production increase.
Speaking at a conference hosted by Morgan Stanley, Ortberg said that the largest variant of the 737 MAX, the 737-10, will be certified “very soon”.
It must be mentioned here that the certification of the 737-10, which makes up about 30% of all 737 orders, has been several years behind schedule.
In August, American regulators certified the smallest variant, the 737-7.
Problems exist at the 787 Dreamliner production front as well, with the task of manufacturing 10 jets a month taking longer than expected due to engine shortages.
“The company is currently producing eight of the twin-aisle jets a month, but slow certification of premium seats has reduced deliveries,” Ortberg said.
“So, I think you’re going to still see us; even though we may have a pretty good rollout rate of eight a month, you’re going to see us be a little bit lumpy here month to month on 787 delivery,” he added further.
“The slower 737 and 787 rate increases mean that Boeing likely will not get to USD 3 billion in free cash flow, the upside of its guidance given in January, and instead generate USD 2 billion, the midpoint of its guidance,” said Boeing Chief Financial Officer Jay Malave.