Boeing Faces Delays in Boeing 787 and 737 Deliveries Amid Supplier Shortages and Quality Issues
Boeing is experiencing a slowdown in the production and delivery of its Boeing 787 Dreamliners and Boeing 737 MAX aircraft, attributed to ongoing supplier shortages and quality control challenges. Scott Stocker, vice president and general manager of the Boeing 787 program and Boeing South Carolina site leader, communicated to staff the impact of these shortages on production rates, noting a slower increase than previously anticipated.
In its first quarter financial results for 2024, Boeing disclosed that it delivered 13 Boeing 787s, slightly up from 11 in the same period the previous year. However, Boeing 737 MAX deliveries have decreased significantly, with only 67 aircraft delivered compared to 113 in the first quarter of 2023. The company also delivered three Boeing 767s during this period. These figures reflect a challenging quarter for Boeing, with total revenues reaching $16.6 billion, and operating cash flow and free cash flow recorded at $3.4 billion and $3.9 billion, respectively.
Boeing’s President and CEO Dave Calhoun highlighted the company’s efforts to address these issues, stating, “Our first quarter results reflect the immediate actions we’ve taken to slow down 737 production to drive improvements in quality. We will take the time necessary to strengthen our quality and safety management systems, and this work will position us for a stronger and more stable future.”
This strategic slowdown follows a notable incident on January 5, when a door plug blew out of an Alaska Airlines Flight 1282 operated by a Boeing Boeing 737-9, due to missing bolts, leading to the grounding of 171 Boeing 737-9s. Moreover, Boeing has been dealing with a backlog of Boeing 787 deliveries, which had been previously suspended for two years starting in 2020 due to manufacturing defects.
The reduced production pace particularly impacts the Boeing 737 program, which has been adjusted to below 38 planes per month. This adjustment allows for the integration of quality management system enhancements and the reduction of travelled work within its factory and supply chain, following critical feedback from a Federal Aviation Administration (FAA) audit.
Despite these production setbacks, Boeing secured 125 net orders for commercial aircraft during the quarter, including 85 Boeing 737-10s for American Airlines and 28 Boeing 777X for various customers, such as Ethiopian Airlines. The company completed 83 aircraft deliveries across its commercial aircraft segment, which generated revenue of $4.7 billion and achieved an operating margin of 24.6%.
With a backlog exceeding 5,600 aircraft valued at approximately $448 billion, Boeing is focused on overcoming these current challenges to meet its long-term delivery commitments and restore confidence in its production capabilities.