Boeing (BA) is confident that it can increase the production of its highly popular 737 MAX jets to 42 per month, a significant boost from its current pace. CEO Kelly Ortberg made the announcement at the Bernstein Strategic Decisions conference, also revealing plans to ramp up production to 47 per month by the end of 2025.
Production Increase in the Works
Currently, Boeing is focused on stabilizing production at 38 jets per month, where it was capped by the U.S. Federal Aviation Administration (FAA) in 2024. This cap followed a midair accident that led to increased scrutiny of Boeing’s safety and production quality programs. Once the FAA approves the increase to 42 per month, the company plans further incremental increases in production, typically in increments of five aircraft every six months, as Ortberg noted.
Production Defects Decrease
Boeing has seen a 30% reduction in production defects on the 737 MAX program, signaling significant improvements in quality control. Ortberg mentioned that almost every customer is reporting higher-quality aircraft at delivery, a positive sign for the company as it works toward higher production targets.
Financial Outlook and Cash Flow
Increasing production is a critical step in getting Boeing back on track financially. Ortberg expects the company to be cash-positive by the second half of the year, after burning through $2.3 billion in cash during Q1. The CEO emphasized that strong financial performance would follow successful production increases, stating, “We need to think about it that way.” The production ramp-up is seen as essential to reversing the company’s financial challenges.
Certifying New 737 Variants
As Boeing works on increasing production, it is also making progress on certifying the 737 MAX 7 and MAX 10 variants with the FAA. The delays in certification have been partly due to concerns over the engine de-icing system, but Boeing is expected to finish critical testing by July, with full certification anticipated by the end of the year. The backlog includes nearly 1,200 orders for the MAX 10 and 332 orders for the MAX 7.
Impact of Trade Tensions
Amid the ramp-up in production, Boeing is also dealing with the effects of the trade war. After a period of halted deliveries to Chinese airlines in retaliation for U.S. tariffs, Boeing expects the impact of the tariffs to be less than $500 million. This impact is primarily linked to the tariffs Boeing faces for foreign-made components installed on planes delivered to U.S.-based airlines and lessors. Ortberg also mentioned that Chinese airlines would resume taking deliveries in June.
787 Production Increases
In addition to the 737 MAX, Boeing is working to increase its 787 production from five to seven per month, with approval from the FAA. The company is eyeing a potential increase to 10 per month in the future. However, some completed 787 aircraft are still awaiting delivery due to delays in certification for new passenger seat designs, which Ortberg expects will continue through the end of the year.
