The slowdown comes amid heightened scrutiny following the company's Alaska Airlines 737 Max door plug blowout
Boeing $BA delivered the fewest planes in almost three years last quarter. The company said Tuesday that only 83 of its jetliners made their way to customers from January through March — the lowest number since 2021, when production was still recovering from a pandemic-induced slowdown.
In the last three months of 2023, Boeing delivered 157 planes. The shortfall came just as the company was trying to ramp up production to retake its lead over French rival Airbus.
But amid heightened scrutiny from regulators after a door plug blew out on an Alaska Airlines 737 Max 9 plane in January, the company has had to slow things down as it deals with everything from Federal Aviation Administration callouts of its safety culture to Justice Department criminal probe and lawsuits from passengers who were onboard the Alaska Airlines flight.
In October, Boeing told investors that it would be able to bump 737 Max output from the current 38 planes a month to 50 by about 2025. After the Alaska Airlines incident, though, Boeing abandoned its fiscal guidance for the year and affirmed its then-current rate of production. But at its now-current rate of production, it’s getting just 27 planes a month out the door.
Boeing’s backlog of unfilled orders stands at almost 6,300.
Airline customers who have been waiting patiently to get 737 Max jets the ordered years ago are getting more impatient by the day. In one high-profile example, United Airlines reportedly reached out to Airbus to lease three dozen planes while it waits on long-delayed Boeing planes.
“We are in the market” for Airbus’ 737 Max rival, CEO Scott Kirby said at an investor conference in February. “And if we get a deal that the economics work, then we’ll do something.”
This was supposed to be Boeing’s year, when it finally put its last 737 Max crisis behind it and CEO Dave Calhoun would be able to chart a path toward smoother skies. But then an ill-fated Alaska Airlines flight threw Boeing’s whole year into chaos. By late March, Calhoun was out.
Boeing stock was down about 1.3% in Tuesday afternoon trading. But it’s lost almost 29% so far in 2024, making it one of the worst-performing stocks in the S&P 500. And ratings agency Fitch says the company’s default risk is inching closer to junk bond territory.
The company reports earnings in two weeks.
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