Boeing still working to increase production rates

05/08/2014 1:42 PM

05/08/2014 1:43 PM

Boeing’s pace of commercial airplane deliveries slowed to 56 in April, or 10 fewer than the month before, keeping it under the target needed to meet its annual delivery forecast.

The company remained the world's biggest plane maker, however, besting the 52 jets that rival Airbus produced in the month.

Investors watch jet deliveries because Boeing and Airbus receive the bulk of the cash for jet sales when customers fly them home. Boeing investors are particularly keen to see deliveries rise to supply cash for share buybacks and dividends and to work off $25 billion in deferred costs associated with the 787 Dreamliner.

Boeing’s April delivery decline mainly reflected the fact that it delivered 39 narrow-body 737s, down from 44 in March.

The company also delivered just eight 787s and eight 777s in April, down from 10 each in March, and it delivered one 747, down from two in March.

Boeing's net orders, meanwhile, rose by three 737s in the week through May 6, reflecting 10 new orders for 737s, and cancellations of seven 737 planes.

Boeing is trying to increase production of its 737 to 42 a month in the current quarter and to 47 a month by 2017.

Airbus is currently making its rival A320 jetliner at a 42-a-month rate and aims to hit 46 a month in the second quarter of 2016.

Boeing also is increasing the rate of its 787 production to 10 a month, and said in January that it had rolled out the first jet built at that rate.

Production issues at the 787 assembly plant in South Carolina prompted Boeing earlier this year to hire hundreds of contractors and send unfinished work to the factory in Everett, Wash., for completion.

Boeing said it is “progressing well” in reducing production problems in South Carolina, but declined to give details. Workers there are due to receive a bonus this month if they meet productivity targets.

If Boeing sustains the pace seen in the first four months of 2014, it would deliver about 651 jets this year, well below its full-year forecast of 715 to 725 jets in 2014. Boeing delivered 648 jetliners last year.

Delivery rates can lag production, however, because after a plane rolls out of the factory it undergoes testing before it is accepted by a customer.

Airbus has said it expects to deliver about 626 jets this year, the same number as in 2013.

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