Boeing Co. (BA) has disclosed a significant reduction in its jet deliveries for October, reporting only 14 commercial jets handed over to customers, a stark contrast to the 34 jets delivered in October of the previous year. This drop-off comes in the wake of a strike by its West Coast factory workers, which began on September 12 and notably disrupted production. The strike concluded on November 5, and Boeing has mandated that all workers return to their posts by Tuesday, although it will take several weeks for full production capacity to resume.
The production halt affected several of Boeing’s key models, including the 737 MAX, as well as the 767, 777, and 777X. The strike’s impact has placed additional pressure on Boeing, particularly as it aims to ramp up the production of the 737 MAX to 38 jets per month to bolster its revenue stream. This goal is set against the backdrop of heightened oversight by the U.S. Federal Aviation Administration (FAA), following incidents that have underscored the need for rigorous safety and quality checks.
Despite the disruptions, not all of Boeing’s operations were affected; the production of the 787 in South Carolina continued unimpeded. The October delivery figures included nine 737 MAX jets, four 787s, and one 767 freighter for FedEx. From the onset of the strike through October, Boeing managed to deliver 24 aircraft in total.
On the sales front, Boeing reported 63 gross orders in October without any cancellations. These orders included 46 for the 737, four for the 777 freighters, and ten for the 787. Year-to-date, Boeing has secured 378 gross orders and, after adjustments for cancellations and conversions, net orders stand at 335. Notably, a significant chunk of these orders, about 60%, came between July and October, indicating a late surge in sales.
This scenario unfolds as Boeing’s European competitor, Airbus, announced its October delivery numbers at 62 jets, striving towards an adjusted annual delivery goal of around 770 planes, down from an earlier target of 800 due to supply chain issues.
Boeing’s challenge now is not only to recover its production pace but also to maintain stringent quality controls under increased regulatory scrutiny, ensuring all employees are up-to-date with their training certifications. This situation underscores the delicate balance between production efficiency and safety in the aerospace industry, where Boeing is currently navigating through turbulent times.
Price Action: As of press time, Boeing is changing hands at $144.64, down about $4.31, or 3.89%, intraday.
Reference: Reuters
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