During a third quarter earnings call on Wednesday, Boeing CEO Dave Calhoun said he expects the 777X, pictured here, to be ready for deliveries and entry into service by late 2023. (Boeing)
Boeing executives provided several program updates for three of their flagship commercial aircraft programs including the 737 MAX, 777X and 787 as the manufacturer reported $15.3 billion in third-quarter revenue on Wednesday, driven primarily by higher commercial aircraft deliveries and services.
Revenue for Boeing's commercial airplanes division amounted to $4.5 billion during the third quarter, a 24 percent increase from the same period a year ago while the company also secured a total of 106 commercial aircraft orders while completing 85 total deliveries. Boeing CEO Dave Calhoun and CFO Brian Davis each provided updates and some insight on some of the ongoing progress and work remaining on the 737 MAX and 787 production and delivery rates while sticking to the same timeline they have previously provided for initial deliveries and entry into service of the 777X.
"Our commercial market is showing improved signs of recovery with vaccine distribution and border protocols beginning to open. As demand returns, supply chain capacity and global trade will be key drivers of our industry and the global economy's recovery," Calhoun said.
While still working through some manufacturing quality and material related issues with the 787, Boeing is still focused on establishing the developmental foundation for its next generation aircraft program.
“In addition to the 737 MAX-7, the MAX-10 and the 777X, we're investing in our future, laying the foundation for our next commercial airplane development. This quarter, we stood up an integrated product team to bring together a digital environment where the next commercial new airplane and production system can be designed together. While we have not launched a new airplane, this is an important step in our digitization journey and our development journey to evaluate how we holistically design build test certify and support the airplane and production system,” Calhoun said.
Between July and September, Boeing completed 62 deliveries of the 737 MAX—the most it has recorded in a quarter for that aircraft type since the first quarter of 2019. Since the un-grounding of the MAX by the FAA a year ago, 31 total airlines have returned more than 200 previously grounded aircraft to service and have safely operated more than 500,000 flight hours with the MAX.
The 737 program is currently being produced at a rate of 19 per month and continues to progress towards a production rate of 31 per month in early 2022. Calhoun told investors that flight testing for the 737 MAX return to service in China was completed in the third quarter, and Boeing continues to anticipate final approval from the Civil Aviation Administration of China (CAAC) by the end of the year.
"We also continue to make progress on the certification of the 737 MAX-7 and the MAX-10. We currently anticipate the first delivery at the MAX-7 in 2022 and the first delivery of the MAX-10 in 2023. As always, we'll follow global regulators lead in the steps ahead on all certification matters," Calhoun said.
70 of the 106 commercial aircraft orders secured by Boeing during the second quarter were for 737 MAX aircraft.
The latest program updates on the 737 MAX come following a recent report published by the Department of Justice outlining an indictment of former 737 MAX Chief Technical Pilot Mark A. Forkner on fraud charges related to the original certification of the aircraft.
Calhoun also acknowledged in an Oct. 27 statement issued to employees the three-year anniversary of the fatal Lion Air Flight 610 accident occurring on Friday Oct. 29.
"Friday, Oct. 29 marks three years since the Lion Air Flight 610 accident, which claimed the lives of 189 people. In remembrance, I ask all Boeing employees to join me in taking a few, solemn moments on Friday to remember those lives lost," Calhoun said. "The memories of those 189 victims, as well as the 157 people who lost their lives on Ethiopian Airlines Flight 302, drive the important work we do and forever remind us of the trust the flying public places in us to bring them to their destination safely. Across Boeing, we must continue to learn from our past, let our strong values guide us, and honor the memories of those lives lost by ensuring a steadfast focus on safety, quality, integrity and transparency in all we do."
Calhoun said that Boeing is seeing strong demand for freighter aircraft, including freighter versions of the 777 right now, and expects to increase its 777 freighter production capacity in the near term.
Regarding the 777X, that latest program development came earlier this month when Boeing started engine performance flight testing for the re-engined 777.
"The airplane is performing well and in-line with our customer commitments based on the data that we've collected to date, we will validate these results and we will continue to work with the FAA to ensure we meet their requirements prior to beginning the certification flight tests," Calhoun said. "We still expect we will deliver the first 777X in late 2023. Given the continued robust freighter demand, and the compelling economics of the 777X, were currently evaluating the timing of launching a freighter version of our 777X airplane."
Boeing has been developing the 777X since 2013, and originally projected its entry into service to occur last year.
The 787 program currently has the least amount of certainty around when it will return to a normal production rate and when Boeing can start resuming deliveries to airlines. Boeing first suffered a setback with the 787 in July, when the production rate was lowered to less than five per month and deliveries were halted due to a manufacturing issue associated with some components of the aircraft located in the forward pressure bulkhead and within sections of the fuselage.
Calhoun said Boeing currently had 105 total 787s in its inventory waiting to be delivered at the end of the third quarter. Timing for Boeing to resume those deliveries is dependent upon ongoing inspections and re-work of some of those aircraft as well as some ongoing work with the FAA.
"We did have a sort of a late breaking [issue] from a parts supplier that unfortunately is a sub tier supplier to other suppliers where we have to track a particular material substitution question that was brought to us by their regulators and track it through every part and then through supplier to us. So that process just takes time. We have segmented those parts, we believe we're in a good place, we don't believe there are any safety ramifications. On the subject of compliance, we just have to make sure we're compliant with the material specs that are included in our design," Calhoun said.