Boeing Delays Stabilizing 737 Production at 47 Aircraft a Month Until Early 2027
Key Facts
Boeing has delayed stabilizing 737 production at 47 aircraft a month until early 2027, after previously targeting that rate in summer 2026, according to Reuters. Chief Financial Officer Jay Malave said the company will miss its target of delivering 500 aircraft this year because production stabilization has been delayed. The revised production target comes after the timeline management forecast in May and delays deliveries the company relies on to support revenue and cash flow. On the earnings call, Chief Executive Kelly Ortberg said wing production is improving, but the company needs to prove the performance is sustainable before increasing the rate. The financial plan targets a move to production of 52 aircraft a month in the second half of 2027.
Boeing’s commercial aircraft segment reported revenue of $10.720 billion in the third quarter of 2026, down 3% from $11.094 billion in the same period of 2025, according to the company’s results. The segment’s operating margin was negative 6.5%, and the company attributed the performance to a less favorable delivery mix, higher anticipated costs from future production-rate changes and increased estimated costs in the supply chain. As a result, this year’s revenue decline coincided with an improvement in operating loss compared with that period, according to the company’s corrected results. The reasons cited for the current quarter reflect pressures tied to the mix of aircraft delivered, production ramp-up costs and the supply chain.
Boeing’s commercial deliveries totaled 161 aircraft in the third quarter, compared with 160 a year earlier, while deliveries in the first nine months rose to 475 from 440, according to the company’s results. Third-quarter 737 deliveries included 124 aircraft, compared with 121 in the third quarter of 2025. Since the start of the year, the company has delivered 367 aircraft of that model, compared with 330 in the same period. The comparison shows delivery growth over the nine months, while the target of a steady monthly production rate of 47 aircraft remains delayed until early 2027. The total order backlog also reached a record $745 billion at the end of the third quarter, including more than 6,300 commercial aircraft valued at a record $612 billion.
Operating cash flow was $1.496 billion in the third quarter, and free cash flow was $464 million, according to Boeing’s statement. But free cash flow remained negative by $359 million during the first nine months of 2026. The company said working-capital timing supported operating cash flow in the quarter, partly offset by about $0.7 billion in settlement payments to the Justice Department. This performance comes as the company delays stabilizing 737 production, while saying that increasing the rate requires sustained wing performance and readiness across the production system. Boeing shares closed at $168.18 on October 27, down 10.69% in the session, according to historical share data.
Ortberg said the company had recorded a 40% improvement in rework during final assembly since the beginning of last year, but said it needed to prove that performance was sustainable before moving to the higher rate. He added that wing production was improving and that the company wanted a credible plan to move to 52 aircraft a month when the system was ready. According to the earnings call, this requires confirming the readiness of the wings, aft production lines and aircraft structures in Wichita. Separately, Boeing said 777-9 certification testing is continuing and the first delivery for the 777X program remains targeted for 2027. The 737-7 also received an amended type certificate from the Federal Aviation Administration during the quarter, and the 737-10 received certification in October.