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Boeing sticks to 2018 delivery goals amid supply chain recovery

Boeing has become the latest major aerospace company to insist it is recovering from supply chain issues that have roiled the industry and left unfinished 737s piling up outside Boeing's Renton production facility.

"The 737 programme continues to make good progress on its recovery… to overcome supply chain challenges, with 61 aircraft delivered in September," Boeing chief executive Dennis Muilenburg says on 24 October. "We expect to recover the 737 line by the end of the year, with fourth quarter deliveries expected to be above the [target] production rate."

The company maintains its goal of delivering 810 to 815 commercial aircraft in 2018.

Shortages of supplies from 737 fuselage-maker Spirit AeroSystems and engine maker CFM International hit Boeing earlier this year, as it was increasing 737 production from 47 to 52 aircraft monthly. Deliveries of 737s plunged to 29 aircraft in July, but have since recovered.

"We now have fuselages being delivered to our purchase order plans," Muilenburg says. "We have had some engine recovery… We see engine recovery by the end of the year."

Muilenburg says production has also been complicated this year because Boeing is manufacturing both 737NG and 737 Max aircraft. That issue should ease next year as 737NG production dries up.

The recovery cannot come soon enough, as Boeing intends to boost 737 production again next year, to 57 aircraft monthly, to clear a 4,700-aircraft backlog.

Muilenburg's comments came as Boeing announced earning a third quarter net profit of $2.4 billion, up 31% year-on-year. Third quarter revenue inched up 3.8% to $25 billion.

The commercial airplane unit generated third quarter revenue of $15.3 billion, flat year-on-year, and operating profit of $2 billion, up 34% in one year,

Newly-formed Boeing Global Services generated $4.1 billion in third quarter revenue, up 14% in one year, and a $543 million profit, up 10%.

Boeing delivered 190 commercial aircraft in the third quarter, including 138 737s (81 737NGs and 57 737 Max), two 747-8s, four 767s, 12 777s and 34 787s, it says.

Supply chain aside, Muilenburg painted an uplifting picture of Boeing's commercial business, saying airline profits and worldwide demand for air travel remains strong, driven by an increasingly-mobile middle class.

Boeing landed new orders in the third quarter for 171 commercial aircraft, worth $13 billion, bringing its total commercial aircraft backlog to 5,800 aircraft, worth $413 billion. That equates to seven years of production, Boeing says.

Muilenburg stresses Boeing continues to push forward with 777X development, having completed production of the static test aircraft and starting production of flight test aircraft.

Boeing remains on track to begin 777X flight testing in 2019, followed by the first delivery in 2020, Boeing says. The company has orders and commitments for 340 777X aircraft.

Boeing is not alone in the supply chain struggle. On 23 October, United Technologies chief executive Gregory Hayes insisted UTC subsidiary Pratt & Whitney is recovering from its own shortages.

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