Supply chain issues further slow Boeing deliveries
The pace of Boeing aircraft deliveries, already slowed by lack of access to the Chinese market, is being hit by supply chain issues. Some planes cannot be completed for lack of items as small as a roll of duct tape.
Boeing said on Tuesday it delivered just 22 planes last month and won 32 net orders.
The aircraft manufacturer delivered 20 narrow-body 737 MAXs from its Renton assembly plant in February, including the 50th delivery of a MAX to Ireland’s Ryanair. Additionally, Boeing delivered two widebody freighters from its Everett plant: a 747-8F for UPS and a 777F for DHL.
There were no deliveries of the 767 in its military tanker or freighter models, and also none for the 787 passenger jet. Boeing is still awaiting approval from the Federal Aviation Administration to correct a series of manufacturing defects on the 787.
Boeing Chief Financial Officer Brian West said on the quarterly earnings call last month that the company was building MAX jets at the rate of 27 jets a month. In addition to newly built jets, it aims each month to clear batches of the 335 MAXs formerly grounded and still parked since the plane was cleared to return to service.
Yet despite the expectation that some previously parked jets might be delivered in addition to those being built each month, the rate of deliveries remains well below the production rate West quoted.
A tape shortage
Many grounded MAXs are destined for China, which has not yet approved the MAX’s return to service after its prolonged grounding following the 2018 and 2019 accidents. This clearance is expected soon, subject to approval. of the Chinese government in a context of political tension in the United States. Relations with China.
Deliveries to airlines in some other countries are hampered by air transport constraints during the pandemic. And in the future, there will be no more deliveries to Russia, and the war in Ukraine will create huge logistical problems hampering long-haul international air travel.
Meanwhile, supply chain issues on the assembly line are slowing the completion of jets being built.
Two people familiar with the issue said some MAXs are rolling out of the Renton factory with unfinished loading bays due to an ongoing shortage of foam tape insulation used as a firestop to keep smoke out of the car. passenger cabin in case of fire. .
Without the tape, mechanics cannot add the final side panels that line the interior of the cargo hold.
Boeing has been scrambling to get more tape rolls, the people said.
Flame retardant tape is used in many industries. Logistics restrictions and labor shortages during the COVID-19 pandemic have resulted in a series of seemingly random supply chain issues.
Some planes at the Renton assembly line are also stuck with late deliveries of passenger seats.
During the earnings call last month, West, the chief financial officer, said: “As we seek to increase both our production rate and our delivery rate this year, we will continue to monitor the impact of ‘omicron on resource availability.’
At the Dubai Airshow in November, Boeing’s sales chief, Ihssane Mounir, told reporters that the supply of equipment installed in aircraft passenger cabins and custom-built for specific customers – such as seats and kitchens – can be a challenge.
In response to questions about tape and seat shortages, Boeing sent out a statement on Monday that did not address those specific issues or the broader supply chain. He only said the timing of aircraft deliveries depends on “customer requirements, logistics and our own process…delivery.”
Orders are still pouring in
Boeing booked gross orders for 32 MAXs in February, including 18 for major aircraft lessor Air Lease Corp., two for unidentified private jet buyers and a dozen for unidentified airlines or lessors. It also booked orders for five 777 freighters.
However, an order for a MAX was canceled and Air Lease Corp. canceled four 787-9s, exchanging the widebody aircraft that cannot be delivered for the additional MAXs ordered.
Boeing’s backlog was supplemented with a net total of 49 aircraft restored to the backlog after being previously removed due to a lack of funding or contract terms making delivery unlikely.
A net total of 45 MAXs and four 787s were put back on hold last month.
Boeing’s official backlog now stands at 4,375 aircraft orders, including unfilled orders for 3,461 MAX.
In the first two months of the year, Boeing won net new orders for 107 aircraft.