Anyone attending the Paris Air Show in 2009 likely remembers the outburst of Qatar Airways CEO Akbar Al Baker directed at Boeing. Executives at the U.S. airframer, he said, should spend less time “wining and dining” and more time on ensuring timely aircraft deliveries. Qatar Airways had ordered sixty 787s but production issues at Boeing left delivery schedules in limbo.
Long-time Boeing executive Stan Deal became CEO of Boeing Commercial Airplanes only in 2019, but he recalls the criticism.
“I never want to disappoint a customer again,” he told AIN when asked about the procedures and processes in place at the company to avoid the certification, production, and delivery headaches that beset the 737 Max, the 787, and the 777X. Part of that commitment will hinge on thoughtful, patient consideration of market realities and the rate of technological advances.
“As you know, we have stated we will not launch a new program before 2035,” Deal noted. “Why would I launch a new airplane when all the existing models sell so well?” Boeing CEO David Calhoun has attributed the decision to a lack of maturity in new technology that would deliver a 20 to 30 percent improvement in fuel efficiency over currently available airplanes.
Meanwhile, the 787 backlog extends through 2026 and no open slots exist for the 737 Max until at least 2028. At the end of April, the airframer enjoyed a backlog of 4,567 commercial airplanes.
“[We must] get back to stable commitments to our airline customers [and assure] that when we say we are going to deliver on X and the performance is going to be Y, that X and Y are true,” said Deal, who added that he and his team at Boeing Commercial Airplanes are working on several “levers” to ensure “we don’t get an angry Akbar [Al Baker] or an angry [Lufthansa Group CEO] Carsten Spohr.”
The first action involves positioning the supply chain for upcoming technologies and future advancements. “We do a lot of precursor supplier development work to safeguard that our suppliers invest in research and development themselves and that the capabilities that they are developing add to the product benefit that we are going to sell to our customers,” Deal explained. The second action involves the division’s future production system, where combining automation and the creation of an environment that allows workers to assemble airplanes “rapidly and precisely” prevails. Other work tracks center on the digital tool suite that facilitates a more predictive development process and on attracting and retaining talent.
At the Paris Air Show, Boeing is displaying the 737 Max 10, the 777-9, and a 787 featuring the livery of Riyadh Air, the planned second flag carrier of Saudi Arabia. “I do expect orders, I honestly do,” Deal said, while pointing out that the airframer already inked several contracts this year, including Ryanair’s firm order for 150 Boeing 737-10s with options on another 150.
Deal vowed he will remain “disciplined” on production rates. “I am not going to run rates irresponsibly high,” he insisted. “I am going to try to run them so I always have a little supply buffer. I think that is prudent and smart.” At the Bernstein conference on June 2, Calhoun said the OEM has set a target rate of fifty 737 Max jets and ten 787s a month starting in 2025 or 2026. The U.S. manufacturer’s main competitor, Airbus, plans to increase the A320neo family production rate to 65 aircraft per month by the end of 2024 and a record output of 75 in 2026.
The supply chain remains constrained, Deal said, though he dismissed the notion that the issue exposes a systemic difficult relationship between the OEMs and their suppliers. “Covid took these companies virtually down to zero and then demand came back very fast,” he said. “The human capital toll was high and in the manufacturing industry, it was difficult to get the human resources back in. The training footprint needed to be re-established.”
Deal expressed optimism that deliveries to Chinese customers will normalize despite the political tensions between the U.S. and China. “Our approach is first and foremost to take care of our customers,” he noted. “Throughout the Covid downturn and the Max grounding, we have been reaching out and our teams remained deployed in China.” The good news, he added, resides with the recent traffic recovery in the country and the region. “When demand is back airplanes need to be delivered,” he concluded.
In 2018, before the Max crashes, the Covid outbreak, and the trade war between the two countries, mainland China accounted for 24 percent of Boeing’s global deliveries. Last year, the airframer delivered just 12 aircraft—nine 777Fs and three Maxes—to customers in mainland China. At the end of April, Boeing held unfilled orders for 160 airplanes in China, consisting of 42 widebodies and 122 narrowbodies.