Workers assemble a Boeing Co. 787 Dreamliner airplane at the Boeing Everett Factory in Everett, Washington.
Patrick T. Fallon | Bloomberg | Getty Images
Boeing has further trimmed its production target for 787 Dreamliner production to five a month in mid-2021 from six as international travel demand suffers in the pandemic, CFO Greg Smith said Friday.
International passenger traffic is around 90% lower compared with last year, Smith said at a Credit Suisse investor conference, impacting the “overall near-term demand for the wide-body markets.”
Boeing shares were down about 1% in late-morning trading while the S&P 500 was up 0.7%.
The planes are used on long-haul international routes, which analysts and industry members expect to be the last to recover from the pandemic because of the virus and a host of travel restrictions.
Deliveries of Dreamliners are also slower than expected because of inspections stemming from production issues, which Boeing disclosed in September.
“The additional time that were taken to inspect and ensure that each of our 787s are delivered to the highest quality standards is – has taken longer than we previously anticipated,” said Smith. The manufacturer didn’t deliver any 787s in November and the inspection “process will continue to slow deliveries in December.”
In October, Smith said on an earnings call that Boeing expects a “big fourth quarter on deliveries” of the 787.
The 787 issues come just as Boeing is eager to resume deliveries of its beleaguered 737 Max plane. Airlines and other customers pay the bulk of the aircraft’s price upon delivery. The Federal Aviation Administration last month lifted the grounding of the jets that was implemented in March 2019 following two fatal crashes after Boeing made several safety upgrades.
Boeing got a boost from budget European carrier Ryanair on Thursday when it announced it was buying an additional 75 Max jets on top the 135 it already ordered.
Airlines with Max planes in their fleets are getting to work to convince travelers the Max jets are safe. American Airlines is set to be the first U.S. airline to fly the planes commercially starting Dec. 29. The airline this week flew reporters on the jets this week and demonstrated how they’re preparing them for service in hopes of boosting confidence in the jet.