Boeing Stock Surges On Report Of 737 MAX Output Boost
Industry insiders tell Reuters Boeing is preparing to increase the output of its 737 Max jets to as many as 42 per month in fall 2022.
Shares in Boeing jumped more than 3% on the news that the troubled planemaker could be entering recovery after its Max planes were grounded for more than 20 months, beginning in March 2019. Also, during that time, Max production was halted, orders were canceled, and deliveries slumped.
It wasn’t until last May that Boeing partially resumed the production of Max. Right before the two fatal crashes of Max jets, killing 346 people, the planes were Boeing’s fastest-selling model.
Boeing wouldn’t comment on Reuters’ report but reaffirmed guidance to raise Max output from an unspecified “low” rate to 31 sometime in the first half of 2022.
Meanwhile, the company paused deliveries on the plane last month but is now delivering planes again after a potential electrical issue. The issue was minor, but optics aren’t great for the company that is in the process of ramping up production across a multi-year timeline.
Boeing burned through more than $20 billion in cash in 2020 due to the Max issues, and shares were more than halved at one point. The Max is still considered the best-selling aircraft of all time, and the company still has a huge backlog of orders. Though air travel is still below the pre-pandemic lows and could stay there for quite some time, there are concerns that cancelation orders could increase.
A recent South China Morning Post said China is unlikely to certify the Max “any time soon.” This comes as relations between US-China continue to sour and are unlikely to improve in the near term as a great power competition continues.
“Some large companies are certainly eager to maintain [their business in] the Chinese market or even expand the Chinese market, but at present, these enterprises can only play a rather small role in US politics,” said Shi Yinyong, a professor of international relations at Renmin University and an adviser to the State Council, the country’s cabinet, which SCMP quoted.
China is a big market for Boeing, and if Max can’t get certified there, then the planemaker will have serious problems. Meanwhile, Max planes are flying in the US and elsewhere.
For all orders, Boeing’s backlog of unfulfilled aircraft orders is around 5,000; of this, about 4,000 are Max planes.
… and there are still calls by former Boeing employees who say issues on Max jets are “still not fixed.”
Fri, 05/21/2021 – 10:20