Boeing CEO says it is taking longer to stabilise 737 MAX output; shares slide
Certification of the Boeing 737-10 is several years behind schedule
Boeing's CEO Kelly Ortberg revealed on September 16 that it is taking longer than anticipated to stabilize the 737 MAX production rate at 47 aircraft per month. The CEO also dismissed the possibility of China announcing a significant aircraft order during a political summit the following week. Boeing's stock price plummeted approximately 2.5% immediately following Ortberg's remarks, and it declined further by 4.5% for the day.
The CEO emphasized that the production of the popular single-aisle 737 MAX is crucial for the company's financial recovery after a series of crises, which have resulted in a net debt of nearly US$26 billion and a damaged reputation. Ortberg stated that the largest version of the 737 MAX, the 737-10, is scheduled to receive certification "very soon."
This variant accounts for about 30% of all 737 orders. In a conference hosted by Morgan Stanley, Ortberg also downplayed expectations that China might place a new Boeing order during President Donald Trump's upcoming meeting with Chinese President Xi Jinping in Washington. The delays in engine supply for Boeing's 787 Dreamliner have further hindered plans to increase production of the twin-aisle jetliner to 10 per month.
Currently, the company is producing eight Dreamliners monthly, but the slow certification of premium seats has reduced deliveries, according to Ortberg. The reduced production rates for both the 737 and 787 mean that Boeing is unlikely to achieve US$3 billion in free cash flow, as previously guided in January, and instead is projected to generate US$2 billion, the midpoint of the guidance, stated Boeing's CFO Jay Malave.
Written by urgent.news from The Business Times - Companies & Markets's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
