A Boeing executive has clarified that the company’s actual 737 production rate is less than the 38-per-month rate cited by Boeing chief executive David Calhoun in January.
Speaking on 13 February, Boeing chief financial officer Brian West said the manufacturer is keeping its suppliers running at a rate of 38 monthly. But Boeing is rolling out finished 737s at a lesser, unspecified rate.
“Right now we have a 38-per-month cycle that the supply chain is cycling to,” West said during an investor conference hosted by TD Cowen.
Boeing’s output in the first half of 2024 “will be lower than that because… we have lots of things to focus on in terms of keeping the airplanes in positions longer, so that we can incorporate all of the learnings that we are finding”, he adds.
Boeing expects to ”be cycling to that 38” rate in the second half of 2024, West says.
CEO Calhoun said something different on 31 January during the company’s 2023 earnings call.
“Today, we’re producing 737s at a rate of 38 per month and we will remain at that rate until the FAA and Boeing is satisfied with our quality and manufacturing process,” Calhoun said.
Some Boeing suppliers took issue with Calhoun’s comment, saying the company has not been producing close to that many 737s. Industry analysts agree that Boeing’s rates are less than Calhoun said, with one analyst saying Boeing’s statements have been unclear.
“We think there is some degree of confusion,” says Michael Merluzeau, an aerospace analyst with consultancy AIR. His firm’s also tracks Boeing’s production, but bases it figures not on suppliers’ rates but on “what comes out of the Renton factory monthly”.
AIR estimates the actual 737 production rate is 20-25 jets monthly.
One supplier pointed to Boeing’s own quarterly operational figures as indicating the company is producing far fewer 737s than Calhoun had said.
The supplier noted that Boeing said its inventory of undelivered 737s declined by about 50 aircraft in the fourth quarter of 2023, and that its total fourth quarter 737 deliveries came to 110. If roughly 50 of those were from inventory, the balance – 60 – were presumably new-built jets, suggesting an actual production rate of about 20 737s monthly.
Boeing declines to comment about that seeming mismatch.
The Federal Aviation Administration capped Boeing’s production rate at 38 monthly in January following the in-flight failure of a door plug on an Alaska Airlines Boeing 737 Max 9.
The FAA is now auditing Boeing’s operation and the operation of 737 fuselage supplier Spirit AeroSystems. West says the audit has been underway for two weeks and will last six weeks total.
“Right now we are in the position where we have to do things like pause the line. We are doing that so that we can get the benefit of the audit,” he says.
