Boeing expects that it will take some 1.5 years for it to complete deliveries of its stored 737 MAX aircraft. In an earnings call this week, the airframer said that it was committed to the 737 MAX program and was intent on clearing backlogs. Yet despite the urgency, Boeing has said that the process would still be a slow one.
“We don’t want to store more airplanes”
After a turbulent couple of years, Boeing is looking at the possibility of reinstating its Boeing 737 MAX production by the middle of this year. However, with the switch to its 737 MAX production line turned on once more, Boeing has the additional pressure of delivering any stored MAX aircraft. And it has quite a few of them.
Boeing has around 400 737 MAX aircraft in storage awaiting delivery. Despite dissipating trust in the aircraft, many airlines have remained faithful to their orders which is great news for Boeing and the effort it has put into its product.
However, once MAX production begins again deliveries will be slow. Boeing estimates that it could take up to 18 months to complete deliveries as it fits the backlog around its normal operation.
In a transcript of the Boeing Q4 Earnings Call on 29th January, the CFO and Executive Vice President of Enterprise Performance & Strategy at Boeing said the key was to shift the backlog and move slowly with the MAX program. Greg Smith said:
“Don’t think of that as just turning the line back on…obviously we don’t want to build more airplanes and store them.”
“We’ve assumed that the regulatory approval for the 737 MAX will enable deliveries to begin in mid-2020…We’ve assumed that we will resume 737 MAX aircraft production at low rates in 2020 as timing and conditions of return to service are better understood. And then we expect to gradually increase previously planned production rates over the next few years. We’re also assuming that the 737 MAX airplanes produced and stored during the grounding will be delivered over several quarters with the majority of them delivered during the first year after resumption of deliveries.”
Why so slow?
According to LNA, Boeing will be working to an average of 22 deliveries per month and that’s no easy feat since Boeing delivered just 79 aircraft in the 4th quarter of 2019. This new timeline will require the airframer to deliver at least 66 stored 737 MAX aircraft alone without accounting for aircraft from other programs.
There’s going to be a lot of pressure on Boeing’s shoulders in the coming years. So, why is its delivery schedule moving so slowly?
It seems as though Boeing is erring on the side of caution. It’s committed to the 737 MAX and a focal point for the reinstatement is strengthening the program. The ungrounding of the MAX is not just about fulfilling backlogs. It’s about retraining crews and rebuilding trust. Moving slowly allows Boeing to keep a close eye on any changes that could negatively impact 737 MAX performance.
That said, whilst Boeing’s intentions are well-meaning, the delay to deliveries presents further setbacks for customers awaiting the new aircraft.
Boeing had previously said that the 737 MAX would resume at the start of 2020. However, it recently shifted the timeline bringing additional disruption to some airlines’ growth and development. The gradual delivery of the MAX will certainly test the patience of some and frustrate others.
However, the FAA expects the MAX to return to our skies even sooner. It could be that Boeing is being overcautious to maintain expectations.
Do you think going slow is the best approach for Boeing? Have your say in the comments!