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Boeing CEO predicts supply chain pressure through 2024

Published 05/23/2023, 09:58 AM
Updated 05/23/2023, 11:31 AM
© Reuters. FILE PHOTO: Dave Calhoun, CEO of Boeing, speaks on stage during the delivery of the final 747 jet at their plant in Everett, Washington, U.S. January 31, 2023.  REUTERS/David Ryder/
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By Andrew Mills and Tim Hepher

(Reuters) - Boeing (NYSE:BA) Chief Executive Dave Calhoun on Tuesday said it could take until the end of 2024 to iron out sector-wide supply chain problems that have hampered global jetliner production.

"Priority one for the two airplane manufacturers is stability," Calhoun told the Qatar Economic Forum, referring to Boeing and its main European rival Airbus.

"We have to resolve the supply chain issues and the surprise associated with it; and we have to resolve it sort of once and for all," Calhoun told the Bloomberg-organised event in Doha.

"That is not a short-term job. It sounds like it might be, but I think it could take all of this year and probably all of next year."

In April Calhoun had reported progress in tackling the supply chain and repeated November guidance that "significant supply chain improvement" was unlikely "until well into 2024".

Calhoun's latest projection on the speed of recovery in the supply chain echoes comments by Airbus Chief Executive Guillaume Faury, who told France Inter last month that production would regain pre-pandemic levels at the end of 2024 or even in 2025.

Despite the overall pattern of disruption, Calhoun said on Tuesday that he did not think recent manufacturing problems with the best-selling 737 narrow-body jet would defer those production schedules for more than "maybe a month or a month and a half".

On future developments, Calhoun said the industry was unlikely to introduce all-new jet designs before the mid-2030s.

"I think in our industry, because of some of the constraints both in propulsion and the design of the wing, it's going to be at least until the mid-2030s before we - in this case I'm just going to assume my competitor - will call out that airplane."

Speaking on the same panel, however, Qatar Airways Chief Executive Akbar Al Baker urged planemakers Boeing, Airbus and Brazil's Embraer to "start looking now" without waiting for each other to trigger the next wave of innovation.

"It is very important that (they) should now think about introducing something new into the industry," he said.

© Reuters. FILE PHOTO: Dave Calhoun, CEO of Boeing, speaks on stage during the delivery of the final 747 jet at their plant in Everett, Washington, U.S. January 31, 2023.  REUTERS/David Ryder/

Boeing had long been expected to launch a new mid-market plane to replace the out-of-production 757 between the single-aisle market and larger wide-body jets. But Calhoun called off the project in early 2020 and called for a fresh approach.

Engine makers say the next advance in fuel efficiency and lower emissions big enough to justify a ground-breaking new plane design is unlikely to come until well into next decade.

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