Boeing takes another charge as deliveries slip

Boeing has failed to meet its first quarter delivery target as it attempted to resolve Next Generation 737 production delays, and has been forced to take a further $350 million provision on the programme.

The charge comes on top of an earlier $700 million provision against cost overruns on the new 737 family. Effectively, this means that Boeing expects to take a $1 billion loss on production of the first 400 aircraft, with further charges still a possibility, depending on the success of efforts to recover production rates.

Despite round the clock retrofit work on the new 737 and better performance from suppliers, Boeing narrowly failed to meet its first quarter targets. Deliveries totalled 108 aircraft, including nine completed by the Douglas division at Long Beach. Boeing earlier estimated it would deliver around 115 aircraft for the quarter and revised this down to 110 as recently as 24 March, once the scale of the 737 modification work became apparent. "To achieve that would have required a lot of last minute deliveries," it says.

The delay in delivery of two 757s for the US Air Force also contributed to the shortfall, again because of delivery delays of customer equipment.

Seattle's tally of 99 deliveries is dramatically up on the first quarter of 1997, when 68 were turned out. Deliveries from the Renton factory totalled 57 narrowbodies, while 42 widebodies were delivered from Everett.

Source: Flight International