Boeing to Slash Its Rate of Production

by Jason Appleby

Boeing CEO, Dave Calhoun, announced on Wednesday outlining the company’s adjustments to its aircraft production.

As a result of the COVID-19 pandemic, Boeing will reduce the manufacturing rate of the 737, the 777/777X and the 787 Dreamliner.

Is the Coronavirus to blame?

After a tough year, the manufacturer hasn’t just suffered from the pandemic; its biggest downfall came from the grounding of the 737 MAX.

Along with financial implications due to customers cancelling and deferring orders, Boeing has paid out significant amounts to cover damages incurred due to the MAX’s flight ban. Because of this, the company has reported losses of $2.4 billion for Q2.

In a recent letter sent out, Dave Calhoun said:

The reality is the pandemic’s impact on the aviation sector continues to be severe (…) This pressure on our commercial customers means they are delaying jet purchases, slowing deliveries, deferring elective maintenance, retiring older aircraft, and reducing spend — all of which affects our business and, ultimately, our bottom line,
To align to a smaller market, we lowered commercial production rates and took tough workforce actions throughout the quarter. Unfortunately, it’s become clear that we need to make further adjustments based on the prolonged impact of COVID-19.

So, what about other aircraft?

With the production of the new 777X aircraft delayed until 2022, our attention turns to the 787 Dreamliner. The 787-production rate is currently at ten aircraft per month but is expected to drop to just seven by 2022. However, only six 787s will leave the factory each month in 2021.

Delta Airlines Boeing 787

Delta Airlines Boeing 787

The ‘Queen of the skies’ 747 productions will cease in 2022. Until then Boeing will continue to focus output on the freighter version.
To close out quarter 2, Boeing delivered 20 commercial aircraft from a backlog of 4,500. This values at around $326 billion.

What are your thoughts on this? Will Boeing survive the remainder of the pandemic? Let us know what you think in the comments.

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