Boeing to ramp up 737 Max production amid safety concerns
What's the story
Boeing is planning to increase its 737 Max production rate, reaching a monthly output of 42 jets as early as October, contingent on regulatory approval and other factors, according to Bloomberg. This move is part of the company's broader efforts to regain its footing in manufacturing processes and win back the trust of the Federal Aviation Administration (FAA). These efforts follow a near-catastrophic accident last year, which was among the factors prompting changes in Boeing's leadership and safety protocols.
Future plans
Production rate increase also planned for 2026
Boeing is also planning to further increase its production rate in April and late 2026. These changes could potentially boost the output to around 53 jets a month by the end of next year. The company has been working toward increasing its monthly rate from 38 jets, the limit set by the FAA.
Regulatory oversight
FAA oversight of Boeing's processes
The FAA has said it will continue to oversee Boeing's production processes and work with the company to determine if it can safely increase production. To reach this first step of returning 737 output to pre-COVID levels, Boeing still needs to convince the FAA that its Seattle-area factories and hundreds of suppliers can keep up without compromising quality.
Financial impact
Financial implications of increased production rate
Boeing's decision to speed up its production rate is crucial for the company's financial recovery and debt repayment. The company has said that cash flow will start turning positive as 737 output rises. Investors will be watching these two metrics closely when Boeing reports its third-quarter earnings later this month.
Production assurance
Production schedule and performance metrics set by Boeing leadership
Boeing's leadership has stressed that the company's production schedule will be dictated by the performance of its factories. The leadership is confident that Boeing will hit the next production milestone in Q4. The company has set six performance metrics for the FAA to track progress in addressing production shortfalls, including monitoring supplier shortages and parts installed or repaired after jets leave the factory.