Boeing Commences Deliveries of Repaired 737s, Emphasizes Pricing Discipline

In a recent announcement, Boeing revealed that it has initiated the delivery of repaired 737 jets from its inventory to customers following a temporary halt caused by a manufacturing issue. The company also assured stakeholders of its commitment to maintaining “disciplined” pricing for its aircraft during the current thriving market conditions.

This resumption of deliveries is anticipated to aid Boeing in achieving its target of delivering 400-450 jets this year. The goal holds significant importance for investors as the aviation giant strives to recover from the setbacks it faced due to two fatal crashes and the global pandemic.

During a conference organized by Wolfe Research, Boeing’s CFO Brian West mentioned that the company expects deliveries to reach approximately 30 per month in the first half of the year and rise to around 40 per month in the latter half.

Boeing had previously suspended deliveries of certain 737s earlier this year due to improperly installed brackets that connect the vertical tail with the fuselage, a component manufactured by Spirit AeroSystems. Although some analysts speculated that this halt would impede Boeing’s plans to increase 737 MAX production from the current rate of 31 per month to 38, West reiterated the company’s confidence in achieving that target in 2023.

While addressing Boeing’s financial outlook, West acknowledged that the higher end of the projected $3 billion to $5 billion free cash flow range may face some pressure due to supply chain challenges within its defense business. However, he assured stakeholders that the company remains committed to the stated goal.

West expressed positivity about the current market environment, noting that it is favorable for realizing competitive prices. He emphasized Boeing’s commitment to maintaining pricing discipline in order to maximize value.

Both Boeing and its European competitor Airbus have witnessed a surge in order books as airlines rush to purchase aircraft to meet the growing demand for travel, thereby strengthening the bargaining position of the two leading planemakers.

West further stated that Boeing is continually securing future sales, underscoring the company’s positive outlook.

While the market conditions appear promising, supply chain disruptions continue to be a key concern. West highlighted that certain aspects of the supply chain still require improvement in order to meet the desired standards.

Boeing’s resumption of 737 deliveries and its commitment to pricing discipline reflect its determination to rebound from previous challenges and capitalize on the current market opportunities. However, the company remains vigilant about supply chain issues that need to be resolved for seamless operations.