Boeing increasing 737 production after consulting FAA
“We are moving forward at 47 pace and should be there in the next few months,” Ortberg said at the Bernstein Annual Strategic Decisions Conference.
The company aims to move to 52 jets per month by early next year after opening its fourth 737 production line in Everett, Washington.
“I think the whole world was watching to make sure we gave up 47 and 52 points,” Ortberg said.
An air panel explosion on a nearly new 737 MAX in January 2024 revealed significant production quality issues at the US planemaker and prompted intense scrutiny from customers and the FAA, which has limited 737 production to 38 per month. We lifted the lid in October.
INCREASING THE PRODUCTION KEY AFTER LOSSES
Increasing 737 production is critical to Boeing’s ongoing recovery after years of crises that resulted in losses of more than $35 billion from 2019 to 2024. The company made $2.2 billion in profits last year, thanks to $10.6 billion in sales from its subsidiary Jeppesen, a provider of digital aviation services, according to its financial filings.
Shares of Boeing rose nearly 4% in morning trading Wednesday and then stabilized around the opening price. Ortberg said Boeing has largely completed certification flight testing for the MAX 7 and 10, the smallest and largest variants of the narrow-body jet. Certification of the two models and Boeing’s new wide-body 777-9 took several years longer than expected, creating a significant drag on Boeing’s earnings.
He said he was “pretty confident we won’t see any disruptions during the remaining phase of flight testing” to certify the new 737 MAX engine anti-icing system.
“I think the area I should highlight where I didn’t achieve my goals was completing certifications for new commercial aircraft earlier,” he said.
Production of Boeing’s twin-aisle 787 planes remains at eight per month after falling earlier this year due to delays in GE Aerospace’s engines. Certification issues with new premium seats also slowed deliveries of completed 787s. Boeing hopes to increase production to 10 per month by the end of this year, as long as engine deliveries continue, Ortberg said.
The aircraft manufacturer did not ask its customers to postpone jetliner deliveries due to the Iran War and high fuel prices. Instead, many customers say they would receive deliveries sooner if possible, Ortberg said.
CHINA IS DETERMINED FOR ITS FUTURE ORDER
China pledged to order 200 Boeing jets in the future during President Donald Trump’s summit with Chinese leader Xi Jinping earlier this month. This was Boeing’s first major commitment from China in almost a decade. But investors were expecting a larger order, and Boeing’s share price fell following the announcement.
“I think people are focusing a little too much on the initial amount,” Ortberg said Wednesday.
China needs hundreds of new planes a year to support its economic growth, he said, and that initial commitment should be followed by many more orders.
WEAPON DEMAND IS INCREASING
Demand for Boeing’s ammunition is “all the way up,” Ortberg said, adding that the company is “talking about how much we can produce, not how many we can order.”
He said the U.S. Air Force is “super pleased” with progress on the F-47 sixth-generation fighter jet program, which Boeing was awarded last year, adding that Boeing is “really focused on doing things differently and having a successful development program.”
Over the past decade, Boeing has had to collect significant fees from various fixed-price military aircraft development programs.
But Ortberg said the company is more disciplined about new contracts. “We actually moved away from some of the (fixed-price) work that we would have undertaken in the past.”
