Boeing 737 production milestone delayed due to supply constraints

Boeing has informed its suppliers that it will delay a critical production milestone on the 737 jet family by three months. This is based on two industry sources cited by Reuters. This pushback of three months comes in response to ongoing production difficulties.

The new supplier schedule aims to produce 42 737s per month starting in September, moving the timetable from the initial target of June. There has yet to be any official word from Boeing on this adjustment.

Production rates at Boeing have been slowed, particularly in light of increased regulatory scrutiny from the FAA after the January incident. During the incident, a door plug came off mid-air on an Alaska Airlines plane, causing regulators, airlines, and lawmakers to monitor the situation closely.

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Boeing uses a master schedule to interface with suppliers, which outlines how Boeing expects suppliers to be producing. However, that document does not necessarily represent what is happening in the supplier or production realm due to regulatory pressure and their suppliers' limited power. The new milestone delay from Boeing highlights that supply issues have not been solved.

Meanwhile, Airbus, the largest aircraft manufacturer in the world, is also facing shortages of parts and labour, as reported by Reuters last month.

The new supplier schedule released now has a target production output of 47 units per month by March 2025, delayed from January 2025. Boeing stock fell by 2.2 per cent on Friday.

Boeing also announced that they are expected to have negative cash flow through 2024. The delivery rate in the coming quarter is likely to remain unchanged.