Production was halted in 2019 after Boeing's fastest-selling model was grounded in the wake of fatal crashes. It resumed last May at a fraction of its original pace while Boeing navigated regulatory approvals and a fragile supply chain.

It is still awaiting the go-ahead from China after winning Western approvals late last year. Chief executive Dave Calhoun has warned that the timing of remaining approvals will influence the shape of Boeing's final production ramp-up.

As an interim step, Boeing hopes to speed monthly output from single digits now to about 26 a month at the end of 2021 at its Renton factory near Seattle, two of the sources said.

Higher production could inject much-needed cash into the supply chain and reduce Boeing's component costs.

The Puget Sound aerospace industry has already started to pick up steam. Sources say Boeing has been placing parts orders again, while fuselages can be seen heading by rail to the Seattle area from Spirit AeroSystems' Wichita factory.

Steep climb

That comes as demand for medium-haul jets such as the 737 MAX and competing Airbus A320neo begins to recover from the effects of the Covid-19 pandemic, boosted by widespread vaccinations, especially in the busy US domestic market.

However, several US and European suppliers view output plans of both planemakers as optimistic, saying that concerns remain over the health of the global aerospace supply chain.

"The biggest risk that we can see with Boeing's plans is the inability of the supply chain to keep up," Vertical Research Partners analyst Rob Stallard wrote in a client note about Reuters' story.

Boeing's efforts to restore production are also tied to the pace at which it offloads an inventory of parked airplanes that swelled during the nearly two years the MAX was grounded.

The published target of 31 a month has already slipped from late 2021 to early 2022.

In Europe, Airbus has ordered suppliers to get ready for higher output while warning them over quality glitches that can reflect overstretched supply chains.

Both plane giants are embarking on their steepest ever climb in output, drawing reassurance from accumulated parts inventory and the fact that their plants had already covered the same territory in the past, albeit at slower rates of increase.

Read more from Corporate
Post Comment