Boeing production problem spills over into summer travel

Boeing’s latest setback with production issues means airlines will have fewer planes than they expected to handle big crowds of travellers this summer.

Chief executive David Calhoun said this week that inspections and repairs related to unapproved fuselage parts would prevent the company from delivering dozens of 737 Max jetliners to airlines in time for the summer season. But it would not affect plans to increase the production rate for the best-selling plane, he said.

Calhoun told Boeing’s annual shareholder meeting that delivery delays would remove about 9000 seats from airline schedules this summer.

He did not give the number of planes used in that calculation, but the number of seats typically in a mid-sized Max suggests about 50 planes are expected to be delivered late.

The situation is reminiscent of last year, when production flaws stopped Boeing from delivering bigger 787 planes, and airlines dropped some flights and routes.

Boeing hopes to boost production of the Max, which was halted in late 2019 after two planes were involved in crashes in Indonesia and Ethiopia that killed a total of 346 people. Production has not yet returned to pre-crash rates.

Boeing disclosed last week that subcontractor Spirit AeroSystems used a “non-standard manufacturing process” on fittings where the tail is attached to the fuselage of most Max models built since 2019. Boeing said then that the issue could cause delays in production and deliveries of a “significant number” of the planes.

Calhoun repeated the company’s position that the fittings do not present a safety issue for planes already carrying passengers. The Federal Aviation Administration has not ordered airlines to do anything with those jets.

Boeing said preliminary results showed its shareholders elected the 13 board nominees put forward by the company, which lost US$5 billion last year and nearly $22b since the start of 2019.

Shareholders asked when the company might restore a dividend, which was suspended in early 2020. Calhoun and chairman Lawrence Kellner said they want to invest in the business and reduce debt before returning more money to shareholders.

Boeing shares gained 1.6 per cent and Spirit AeroSystems rose 7.8 per cent on Tuesday.

Boeing is scheduled to report first-quarter results for April 26.