As reported in a story from Reuters, Boeing is looking to restart 737 MAX production sooner than later.
The Perfect Storm at Boeing
Boeing initially suspended the production of the 737 MAX series pending the recertification by the FAA after two fatal crashes. Boeing ran out of parking for the 400 completed and yet to be delivered aircraft. Suspending the production not only effects the narrow-body production workers at Boeing but all of the sub-contractor employees that build components for the 737 MAX.
COVID-19 gave Boeing another problem to deal with – passenger demand falling off the coronavirus cliff. The last thing that airlines need today is more aircraft when they all parking most or all of their fleets while the travel industry sorts itself out. Currently, all production at Boeing both wide-body and narrow-body are on shutdown as Washington state deals with the illness.
Airlines don’t pay for aircraft until they take delivery. Boeing is suffering from a lack of income as they already have 400 completed aircraft parked until the FAA recertifies its airworthiness.
Last year, cancellations exceeded new aircraft orders ending the year with their order book at -87 aircraft.
If that isn’t enough for the troubled program, the FAA has identified other software and construction issues that will also need to be resolved before the 737 MAX is cleared to fly.
Boeing is facing two uncertainties:
- The date that the 737 MAX attains airworthiness approval from the FAA and
- The unknown duration of COVID-19.
Boeing is still hoping for FAA recertification sometime in mid-2020. The 737 program has been the backbone at Boeing Commercial Airplane Company with a current backlog of 4,540 aircraft. With the 400 units that are already built, Boeing still needs to build an additional 4,140 units just to fulfill existing orders.
Boeing has asked some component supplies to be ready to restart their production and begin shipments to Boeing in April. The aircraft manufacturer is seeking $60 billion in financing from the U. S. government.
What Boeing Is Saying
Boeing Chief Financial Officer Greg Smith said when asked by Reuters about the May manufacturing restart goal:
“It’ll be a very slow, methodical, systematic approach to warming the line up, and getting crews back in place”.
“Priority number 1 is getting customers’ fleets back up,” Smith said, adding that a production ramp up will be paired with clearing the MAX backlog. “We don’t want to add to inventory.”
It is interesting to hear from CFO Greg Smith that “getting customer’s fleets back up” is priority number 1. In my opinion, safety must be Boeing’s number one priority not delivery to its customers. The airline business has had the bottom fall out so airlines are in no hurry to pick up aircraft they can’t fly and start making aircraft payments when they are trying to stay out of bankruptcy.
Boeing has to make sure that the 737 MAX is the safest aircraft in production. The 737 program can’t afford another 737 crash regardless of the cause. The traveling public needs to be confident in the safety of the 737 MAX in order for the airlines to fly them.