Boeing slides after cutting 737 delivery goal on supply woes

Boeing Co. falls the most in four months after the planemaker pared its annual forecast for deliveries of its 737 narrowbody jets and disclosed that it may discontinue the smallest and largest “Max” versions of the workhorse aircraft.

In a securities filing, Boeing said it could choose to cancel the 737 Max-7 and -10 variants if a looming deadline for government safety approvals is not extended and “we otherwise fail to achieve certification.” That echoed comments earlier this year by Chief Executive Officer Dave Calhoun.

The disclosure came after Chief Financial Officer Brian West gave a lowered delivery target for 737 aircraft, saying the planemaker now expects to hand over 375 of the jetliners this year. Boeing had previously targeted deliveries of close to 500 before lowering the goal in July to the “low 400s.”

The manufacturer signalled that it won’t be speeding up work on the cash-cow aircraft anytime soon, even as demand surges for fuel-efficient workhorse jets favoured by budget airlines. Boeing expects the 737 monthly production rate to stay in the low 30s through much of next year, but output should rise sharply during the closing months, West said on a conference call to discuss quarterly earnings.

Congress late in 2020 passed a law requiring that all jetliners have more modern alerting systems than those on existing 737s, but it gave Boeing two years to finalise certification of its remaining two Max models, the 7 and the 10. However, it appears the company won’t complete work on either plane before the deadline at the end of this year, the Federal Aviation Administration has warned in recent months.

—Bloomberg