Boeing (NYSE:BA) executives said the company has made progress on commercial production, aircraft certification and defense-program execution, while continuing to work through supply-chain constraints, inventory levels and potential labor disruption.
Speaking at a Morgan Stanley event, President and CEO Kelly Ortberg said Boeing’s production ramp in commercial airplanes has been a major accomplishment, alongside efforts to restore trust with regulators. He said the Federal Aviation Administration’s redelegation of authority to Boeing was “a really, really good sign” of the company’s evolving relationship with the agency.
737 Production Ramp Depends on Wing-Shop Stability
Boeing is producing 737 aircraft at a rate of 47 per month, though Ortberg said the company has not yet reached stability at that level. The primary current constraint is wing production in Renton, Washington, where Boeing has not achieved the flow improvements it expected on its original timetable.
Ortberg said the supply chain, including CFM engine supply, is in good shape for Boeing’s near-term 737 production plans. Before increasing output to 52 aircraft per month, however, Boeing needs to stabilize production at 47 per month in Renton and certify and activate a new 737 production line in Everett, Washington.
The Everett line will initially build four aircraft for line certification. Ortberg said the facility will also provide flexibility to produce more MAX 10 aircraft because the longer model can be built nose-to-tail in Everett, unlike in Renton.
The MAX 10 represents roughly 30% of Boeing’s backlog, Ortberg said, and the company expects approximately 30% of aircraft coming off its production line to be MAX 10s once deliveries begin.
Inventory Reduction Seen as Multiyear Opportunity
Chief Financial Officer Jay Malave said Boeing is reviewing its inventory position and sees a multiyear opportunity to free up “multiple billions” of dollars, though the effort must not interfere with planned production-rate increases.
Malave said Boeing Commercial Airplanes inventory includes normal production inventory, deferred production, stored MAX 7 aircraft and excess inventory in certain commodities. The company expects deferred production balances on the 737 and 787 to begin leveling off next year as cash margins improve relative to average booking rates.
Boeing also expects inventory to decline as it delivers pre-built MAX 7s and MAX 10s following certification, with those deliveries expected to occur over roughly an 18-month period. Malave said the company will seek to reduce excess inventory gradually while avoiding cuts to supplier production levels that could undermine its own ramp.
787 Output and 777X Certification Remain in Focus
Boeing has stabilized 787 production at eight per month, Ortberg said. The company earlier paused the production line while awaiting engine deliveries, and it has not yet achieved the engine-delivery performance needed to move to a rate of 10 per month. He said that improvement is now expected closer to year-end.
Deliveries of the 787 may remain uneven because of seating documentation and certification issues, Ortberg said. Boeing can build the aircraft, but some cannot be delivered until new and complex seat configurations receive the required documentation and certification.
For the 777X, Ortberg said Boeing continues to complete flight-test activities but has not received authorization to begin extended twin-engine operations, or ETOPS, testing. That authorization depends on completion of a certification plan addressing an engine mid-seal issue. General Electric is conducting additional testing, he said.
Some 777X testing could extend into next year, but Boeing continues to plan for deliveries in 2027. Malave said Boeing has made some adjustments to production and delivery schedules but that the changes remain within the program’s estimate to complete. He said the company still expects 777X cash flow to be generally flat next year, improve in 2028 and turn positive in 2029.
Cash-Flow Outlook Maintained; Labor Vote Approaches
Malave reaffirmed Boeing’s 2026 free-cash-flow guidance of $1 billion to $3 billion, with approximately $2 billion representing the framework within that range. He said the company’s rate ramps on the 737 and 787 have shifted somewhat later in the year, making upside from higher back-half deliveries less likely than before.
Looking toward 2027, Malave said cash flow should grow, though it will still be affected by pricing penalties and excess advances that Boeing must work through. He said Boeing’s longer-term normalized free-cash-flow framework remains broadly intact, based on production rates above 50 aircraft per month for the 737 and above 10 per month for the 787, along with eventually positive cash generation from the 777X program.
Ortberg said avoiding a work stoppage involving the SPEEA engineering union is Boeing’s highest priority. A strike would halt 777 certification work and affect 737 production, though Boeing has contingency plans intended to keep some level of 737 output operating. A new offer endorsed by the negotiating committee is expected to be put to a vote before the current contract expires Oct. 6.
About Boeing (NYSE:BA)
The Boeing Company is a global aerospace company that designs, manufactures and services commercial airplanes, military aircraft, satellites, space systems and other aerospace products. Its principal business areas include commercial airplanes, defense and security, and aftermarket services that support aircraft operations throughout their life cycles.
Boeing’s commercial portfolio includes the 737, 767, 777 and 787 families of jetliners, while its defense and space operations provide products and services for the U.S.
