Boeing (NYSE:BA) said Wednesday it will deliver fewer 737 Max aircraft than it previously expected this year as it works through production flaws detected on some of the best-selling aircraft.
The company expects to hand over between 375 and 400 of its workhorse plane this year, down from a previous estimate of 400 to 450, which Boeing’s CFO reaffirmed during a conference last month. It marks a headwind for Boeing and for airline customers eager to receive new, more fuel-efficient jetliners.
Boeing maintained its expectations for 2023 free cash flow of $3 billion to $5 billion, despite the production problems.
Boeing has been working to increase output of new planes to meet demand for a recovery in air travel after the pandemic. Budget carrier Ryanair, for one, recently cut its winter schedule, blaming delivery delays from Boeing.
Sales in the manufacturer’s commercial aircraft unit rose 25% to $7.88 billion from the third quarter of 2022, boosted by deliveries of wide-body 787 Dreamliner planes, though lower 737 deliveries and abnormal production costs led to a negative operating margin of 8.6%.
Boeing said it plans to ramp up output of the 737 to 38 planes per month by year’s end and said it is transitioning to Dreamliner production of five per month. It reaffirmed its estimate to hand over 70 to 80 Dreamliners this year.
BA shares dipped $1.75, or 1%, to $180.61.