Proactive Investors - Boeing Co (NYSE:BA) is likely to miss its production target of 38 737 MAX jets per month by the end of 2024, according to analysts at Moody's and S&P Global Ratings.
The US aerospace company, which produced 25 jets per month in July 2024, is facing significant challenges as it aims to ramp up production of its best-selling aircraft, according to the agencies.
Moody's and S&P analysts suggest that it might take until 2025 to hit its target due to issues at the Seattle plant, though neither is considering a downgrade to the plane maker's credit rating said the report.
Jonathan Root, Lead Boeing Analyst at Moody's, expects production of 32 MAX jets per month by the end of 2024, with the target of 38 per month target being reached in the second half of 2025.
"We remain in a 'show me' state of mind," he told Reuters.
"We see risks to reaching that number (38), including labor negotiations and the company’s history of underdelivering relative to targets," added Ben Tsocanos, Aerospace Director at S&P Global Ratings.
Boeing has been under intense pressure ever since a door bolt blew off a new 737 MAX 9 in January, which has led to a string of production issues coming to light.
Investigations and groundings meant a $8.30 billion cash outflow in the first half of 2024 and increasing and stabilizing MAX production is critical for Boeing's finances Tsocanos added.
Many of the problems have been laid at the door of fuselage maker Spirit AeroSystems, which produces the 737 fuselages and has had to undergo close vetting of its processes in recent months, leading to delays not only in Boeing deliveries but also for other airline customers.