Although Boeing managed to increase its aircraft deliveries in 2022, a closer look reveals that many of these were planes from the company's existing inventory that had been produced several months or even years earlier. In other words, the industry's apparent rebound may be less comprehensive than it seems at first glance.
Boeing's current aircraft production levels remain well below those seen at the industry's peak in the last decade. This is an indication that the aerospace sector is grappling with challenges and is facing a prolonged and arduous journey to return to pre-pandemic levels.
Boeing reported a notable increase in aircraft deliveries last year, rising to 480 from 340 in the previous year. This surge is largely attributed to a significant uptick in 737 MAX deliveries, with 387 copies. Boeing delivered 263 737 MAXs in 2021. In August of 2022, The American planemaker also resumed deliveries of the 787 Dreamliners, which had been paused for almost two years due to issues with the quality of the fuselage. Last year, the company delivered 31 widebodies, a significant increase from the 14 units delivered in 2021.
While the reported figures indicate a positive trend, the civil aerospace industry in the US is, in fact, experiencing a slower recovery as it might be inferred from delivery numbers. This is because Boeing's production rates are still trailing behind its deliveries, primarily due to the fact that the company is delivering a large number of 737 MAX jets that were manufactured during the 20-month period when the type was grounded.
Boeing did not publicly disclose its actual production figures, but industry analysts estimate that the company's output in 2022 was approximately 25 737s and just a few 787s per month. This is a significant decrease from several years ago when the manufacturer's factories were producing 53 737s and 14 787s each month.
As a result of this rapid contraction, companies throughout the supply chain were forced to cut operations and lay off employees. Many workers subsequently moved to other industries or left the workforce, with little prospect of returning to the aerospace sector.
Boeing is now operating at an accelerated pace to increase its production rates, with demand for its aircraft on the rise. The company has set a target of delivering between 30 to 40 737s per month in 2023 and increasing 787 production to five per month. By 2025 or 2026, Boeing is aiming to deliver 800 jets each year, a figure that matches its output in 2018. This objective will be supported by a monthly production rate of 50 737s, ten 787s, and four 777s.
Like Boeing, Airbus is facing its own set of challenges that are affecting its production rates. These issues are related to the supply chain, including engine shortages. Airbus has been more ambitious than Boeing with its production targets, setting high figures and then later adjusting them to align with the actual capabilities of engine manufacturers such as CFM and Pratt & Whitney.
Airbus recently delayed its objective of producing 65 A320neo-family jets each month by six months, pushing it to early 2024. In addition, the European planemaker missed its delivery target for 2022 by almost 40 jets.
Ramping up production is also a costly process for aerospace companies. Alongside the expenses of increased labor, companies need to invest in infrastructure and pay their suppliers. However, some companies may not have sufficient capital to finance such initiatives.
