Spirit AeroSystems, a key supplier to Boeing and the only manufacturer of B737 MAX fuselages, has said it is currently producing the fuselages at a rate well below Boeing's planned production rate of 38 per month, with no plans for an increase any time soon.
"During late 2023, the company prepared for expected increases in production rates, which have now been delayed. Spirit's current B737 production rate is approximately 31 aircraft per month, which the company anticipates remaining at through the end of this year," it said in its latest quarterly earnings report.
Spirit AeroSystems remains optimistic that, in close cooperation with Boeing, it achieved progress to "enhance quality, eliminate rework, and benefit the entire production system between our companies," President and CEO Pat Shanahan said.
Nonetheless, the supplier admitted that B737 disruptions had an adverse financial impact by reducing cash flow and causing additional "unfavourable catch-up adjustments." Spirit is now analysing various options to improve its liquidity as it continues negotiations with Boeing about a potential takeover.
Boeing is currently authorised to build thirty-eight B737s per month. In its recent earnings report, the manufacturer said the production rate had "deliberately slowed down" to a lower, albeit unspecified number "to incorporate improvements to our quality and safety management systems, including reducing travelled work and addressing supplier non-conformances." However, it said it was expecting to move back to the level of 38 aircraft per month in the second half of 2024.
Although Spirit's announcement casts doubt on the recovery of the production rate to the maximum authorised level, other suppliers said there was pressure from the manufacturer to stick to the original plan.
"Boeing's message to the supply chain [is] keep your foot on the gas and keep to the master schedule of production plan. Boeing is intent on ensuring supplier stability and allowing all suppliers to catch up and prepare for the increase in build rates planned for 2025 and 2026," the chief executive of steel producer USAP, Chris Zimmer, said recently.
According to Boeing's own data, the company delivered sixty-seven B737s in the first quarter of 2024, amounting to just over 22 per month. Given the stockpile of fuselages and airframes at various stages of completion, the manufacturer would likely be able to deliver more than 31 new airframes per month, even with Spirit keeping to this production rate until the end of 2024.
