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Boeing 737 deliveries rebound in August to 48, from July low

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Reuters
Last Updated : Sep 11 2018 | 10:15 PM IST

By Eric M. Johnson and Ankit Ajmera

(Reuters) - Boeing Co said on Tuesday it delivered 48 of its best-selling 737 single-aisle aircraft in August, bouncing back from the 29 it delivered in July, the fewest in years.

Deliveries at the world's biggest planemaker have been delayed as unfinished aircraft pile up at its Renton, Washington plant as a result of production bottlenecks at its suppliers that have disrupted manufacturing.

Boeing's 737 and Airbus' A320 family of single-aisle jetliners are the cash cows of the two aircraft makers, the world's largest.

"Our team made good progress in August and we're focused on fully recovering the delivery schedule by the end of the year," Boeing spokesman Paul Bergman said.

While monthly delivery figures can fluctuate, the numbers give a snapshot of how far behind Boeing is delivering planes against its production target of 52 narrowbodies per month. Deliveries are crucial to planemakers because that is when airlines pay most of what they owe for the aircraft.

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Morgan Stanley analyst Rajeev Lalwani said 737 deliveries were above his estimate of 30 to 35 units, and made him feel more confident about Boeing's ability to hit its 2018 targets.

The snarl in Renton, fueled by shortages of engines and fuselages as Boeing sped production to record levels in June, is likely to hurt third-quarter results and threatens to hinder its efforts to boost build rates again in 2019, some analysts said after meetings in the Seattle area last week.

Boeing largely attributes the logjam to shortages of fuselages from Wichita, Kansas-based Spirit AeroSystems Inc and engines from CFM International Inc, a venture of France's Safran and General Electric Co.

As it works to clear the backlog, Boeing has deployed about 600 employees from other facilities to the Renton site, and sent engineering teams to suppliers, the company said.

Boeing has also started hiring back retired workers on a temporary basis, Reuters reported on Monday.

The retirees will get $500 monthly bonuses in addition to wages while also continuing to receive their pension payments, a union official said.

Boeing executives said last week 2018 cash flow projections, a measure closely watched by investors, would remain unchanged, as would its goal to speed up production again in 2019, analysts said.

Monthly 737 deliveries totaled 48, down from 50 a year ago, Boeing said. Total plane deliveries were 64 in August, compared with 66 units a year earlier and 39 units in July.

Boeing said its total 2018 net orders were 581 aircraft through August, up from 487 planes towards the end of July.

The company said its total 2018 net orders were 581 aircraft through August, up from 487 planes toward the end of July.

Boeing's shares were up 1 percent at $345.49 in mid-day trading.

(Reporting by Ankit Ajmera in Bengaluru and Eric M. Johnson in Seattle; Editing by Shounak Dasgupta and Steve Orlofsky)

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First Published: Sep 11 2018 | 10:11 PM IST

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