Latest 737 MAX issue will only impact deliveries in the near term: Boeing CFO

Boeing says the latest manufacturing quality issue will affect near-term deliveries of the 737 MAX
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The latest Boeing 737 MAX manufacturing defect will only impact deliveries in the near future, the company’s chief financial officer (CFO) and executive president of Finance, Brian West, said during the Jefferies Industrials Conference on September 7, 2023.

West confirmed the manufacturer still aims to deliver 50 Boeing 737 MAXs in 2025 or 2026, with no changes to its “master schedule”.

“We know how to fix it, but it’s early in the rework process and the rework hours will likely be higher and the cycle time longer than the vertical fin” issue faced by the company earlier in the year, West added.

The CFO also detailed how the situation is now a bit more “complicated”, adding that the manufacturer will have to inspect “hundreds of holes”.

“There’s an X-ray inspection process step that’s required, and it’s a very critical part of the airplane. So, we have to make sure we do this right and we will,” the executive added.

West estimated that the issue will impact “about 75% of the 220 [737 MAX] airplanes that were [at] inventory” at the end of Q2 2023.

“We’ve got literally armies of people from Boeing and the supplier working on this issue and to drive stability in their factory,” the CFO continued. “So, if we find something fast, we’ll fix it fast and it will be much less disruptive and I think, we’ll be stronger overall for it.”

West estimated that Boeing would deliver 70 aircraft of the type in Q3 2023, with 22 deliveries completed in August 2023. In Q2 2023, the planemaker delivered 103 737s, including the MAX and P-8 Poseidon aircraft, the same number as in Q2 2022.

Spirit AeroSystems warned of the new issue, which affects the aft pressure bulkhead of the 737, in August 2023. At the time, the supplier said that because it uses several suppliers for the part, only some fuselages were affected.

“Boeing has determined that there is no immediate safety of flight concern associated with this issue for the 737 fleet and that the in-service fleet may continue to operate,” Spirit AeroSystems said in a statement at the time.

Second manufacturing quality issue

This was the second manufacturing quality issue to affect the 737 in a few months.

Spirit AeroSystems disclosed the manufacturing quality defect, affecting the vertical fin of the 737 fuselages, in April 2023. At the time, the Tier 1 supplier for the narrow-body jet said that it had “identified a quality issue on the aft fuselage section of certain models of the 737 fuselage that Spirit builds”.

While it was not an immediate safety of flight threat, West outlined during the company’s Q1 2023 results presentation in April 2023 that 75% of the inventoried aircraft would have to be reworked.

Meanwhile, the company’s president and chief executive officer (CEO) called the defect “gnarly”, adding that it was a Spirit AeroSystems employee who had raised their hand and “said that doesn’t look right”.

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