Boeing Faces Delivery Declines Amid Machinist Strike

Boeing’s aircraft deliveries are experiencing a year-over-year decline through September, raising concerns for the company and its stakeholders. In September, Boeing delivered 33 airplanes, which is six more than the same period last year. However, the total deliveries for the year stand at 291 aircraft, significantly lower than the 371 delivered in the first nine months of 2023. Meanwhile, rival Airbus continues to outperform Boeing, having delivered 447 aircraft through August.

In September, Boeing’s deliveries included 27 of its bestselling 737 Max aircraft. Major customers such as United Airlines, Ryanair, and Southwest Airlines each received a portion of these deliveries, with United taking five and both Ryanair and Southwest receiving three each. Deliveries are critical for Boeing, especially as the company has already incurred over $8 billion in losses this year, with customers typically paying the bulk of the aircraft’s price upon delivery.

The production of these aircraft is primarily based in Renton, Washington, where machinists began a strike on September 13 after rejecting a tentative agreement with the company. This machinist strike, now in its fourth week, has halted operations at Boeing’s factories in the Seattle area. Although the two parties are back at the negotiating table, the union previously dismissed a revised offer from Boeing.

According to aerospace analyst Sheila Kahyaoglu from Jefferies, most of the 27 Maxes were delivered before the strike began. She anticipates that if the strike concludes in October, Boeing could produce around 25 Max aircraft per month. However, the company’s planned ramp-up to 38 aircraft per month will face a delay of approximately one year.

Boeing is set to release its quarterly results on October 23, during which it will disclose the financial implications of the ongoing machinist strike. The September deliveries also featured four 787 Dreamliner planes manufactured in Boeing’s nonunion facility in South Carolina, and the company reported 66 gross orders for new aircraft during the month.

In addition to the current delivery challenges, Boeing has been managing the fallout from a near-catastrophe earlier this year involving one of its new 737 Max 9s. In January, a door plug that lacked essential bolts was ejected during flight, prompting safety concerns and further scrutiny of the company’s production processes.

Despite these hurdles, Boeing maintains a substantial backlog of 5,456 aircraft, indicating continued demand for its products. As the company navigates through these operational challenges, the focus remains on resolving the strike and restoring production levels to meet customer expectations and stabilize its financial standing in the competitive aviation market.

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Sources: AirGuide Business airguide.info, bing.com, cnbc.com