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Boeing increases production of 737s to 38 per month, stock up 7 percent

ALEXANDRIA, Virginia: Boeing executives have said that the company is increasing production of its best selling 737 narrow-body jet, but it will take time for its plants to stabilize production.

The US plane maker also posted second-quarter results above Wall Street forecasts, pushing up its shares by 7 percent, reaching a 1-1/2-year high.

The company said it is now transitioning its 737 production line, including the MAX models that make up the vast majority of 737 production, to building 38 jet aircraft per month, up from 31.

“That is a big important move, and there will be subsequent rate breaks beyond that,” noted Boeing CEO Dave Calhoun, as quoted by Reuters.

The company is already in “prep mode” to raise monthly 737 production to 42, he added.

To increase its 737 production to its monthly target of 50 to 60 jets, Boeing must stabilize production lines as the output increases in 2024.

Meanwhile, Reuters reported that the company has told suppliers that it will increase 737 production to 47 per month in June 2024.

However, continued supply chain constraints could persist for the foreseeable future, Calhoun warned, stating that, “Everyone is fighting for the next part.”

“The impacts of a 737 quality issue at supplier Spirit AeroSystems, a work stop at Spirit and recent collapse of a railway bridge used to transport 737 fuselages, would be contained in the third quarter, but could delay a few airplane deliveries,” he added.

Boeing’s commercial planes division achieved higher revenues due to more deliveries of the 787 Dreamliner, but Chief Financial Officer Brian West said commercial margins would show improvement, but remain negative in the third-quarter.

Boeing expects to deliver most of the 228 MAXs in its inventory by the end of 2024, meaning that increasing production will be crucial.

“Of the inventory jets, 85 are for Chinese customers, and 55 MAXs were originally slated for Chinese airlines and have been re-marketed,” West said, according to Reuters.

In 2023, Boeing plans to generate $3 to $5 billion in free cash flow, as well as deliver at least 400 single-aisle 737s and 70 787 Dreamliners. Boeing increases production of 737s to 38 per month, stock up 7 percent

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