Boeing keeps supplier schedules on pace with production increases planned

Boeing Co. (NYSE BA) has not lowered its orders for suppliers while it fixes the latest production flaws for its single-aisle jets.

The jet manufacturer confirmed that despite delays, it intends to increase its production of Renton aircraft to up to 38 per monthly later this year. It is not altering its schedule for delivering parts to suppliers in the interim to ensure that it can keep up with full production when new jets are able to be produced.

Brian West, Chief Financial Officer of the company, stated that he was "perfectly comfortable" keeping parts inventories at a reasonable level. We think this is a better option than keeping things too close to the deadline.

David Calhoun, CEO, announced that the third production line, in Renton, had been waiting for supplier readiness. It is now fully operational. The company continues to work on launching a fourth line of production in Everett.

Boeing reported that revenue for the first quarter of 2018 increased by 38%, to $17.9 Billion, compared to 2022. Boeing reported a 65% drop in net losses to $425m, or 69c per share. This was better than analyst expectations of a loss exceeding $1 per share.

Boeing was alerted to an issue with fittings by Spirit AeroSystems, its fuselage supplier (NYSE: SPR), earlier this month. The process did not comply with federal regulations. Boeing has said that it will provide Spirit with cash advances and engineering resources to help them make the necessary repairs.

The company has stated that the defects do not pose an immediate risk to safety, even though they go back as far as planes manufactured in 2019.

West told Spirit that he was confident about their ability to ramp along with them. We were on an even course to keep Spirit ahead of us at this ramp rate and they were also on a reasonable track. This defect will only slow them down by a few weeks or months and not years. It will not hinder their ability to reach our rate increases.

The company is expecting to make up for some of these delays by increasing the number of widebody aircraft delivered in the second and later half of the year. This includes the 777 and 767 produced in Everett.

Calhoun stated that despite plans to increase production the backlog of the company now extends well into the next decade.

He said that 'with each new order - and they are large and numerous - deliveries are getting further and farther out.