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Boeing (BA) Deliveries Remain Steady in May

Boeing plans to boost plane production when supply issues ease

U.S. plane maker Boeing (BA) said on Tuesday, June 15, that it delivered 35 jets last month amid ongoing supply chain disruptions stifling production of its flagship 737 MAX jet.

Key Takeaways

  • Boeing said that it delivered 35 jets last month, more than double the deliveries it made in May 2021.
  • The plane maker booked 23 gross orders in May compared with 73 in same month last year. 
  • Boeing has delivered 72 fewer jets than Airbus this year through the end of May.
  • Increased plane handovers could generate additional cash for Boeing and indicate some of the company's challenges are easing.

Plane deliveries in May remained steady on a sequential basis but more than doubled year-over-year (YOY) compared with the 17 Boeing made in May 2021. Meanwhile, the company booked 23 gross orders last month compared with 73 last May. 

CEO Dave Calhoun told investors at a Bernstein investor conference earlier this month that he expects the company to bolster production when supply constraints ease. Calhoun’s remarks come several months after two people familiar with Boeing’s production schedule told CNBC that they expect the plane maker to produce 31 jets a month in the second half of the year before ramping up production to 47 a month in the second half of 2023,

Notable Deliveries

Dallas-based low-cost carrier Southwest Airlines Co. (LUV) received four 737 Max jets last month, while Irish budget carrier Ryanair Holdings plc (RYAOF) took ownership of four MAXs. Aviation leasing companies BOC Aviation Limited and SMC Aviation Capital also each received four Max jets in May. 

On the orders front, German carrier Deutsche Lufthansa AG (DLAKY) placed a ticket for seven 787 Dreamliners and seven 777-8F freighter jets, with the latter not expected to roll off Boeing's production line until 2027.

Deliveries Lag Airbus

Since the start of the year through May, Boeing has delivered 165 jets, significantly below the 237 handovers made by its European rival, Airbus SE (AIR.PA). This partly results from the plane maker's inability to deliver its 787 Dreamliner after regulators raised concern over several fuselage defects in May last year.

However, a Federal Aviation Administration (FAA) official who spoke on condition of anonymity told The Spokesman-Review this week that the agency had accepted the Boeing’s recertification plan for the aircraft, indicating the popular widebody jet could soon be flying back out to customers. 

 Impact for Investors

After several turbulent years in which the aerospace giant has faced numerous challenges from the pandemic, global supply snarls, and regulatory hurdles, investors have placed greater importance on the company's deliveries as it’s when Boeing receives the lion’s share of payment for each aircraft sold.

Increased plane handovers in the months ahead would generate additional cash for the embattled company and indicate some of these issues are easing.

Through Wednesday's close, Boeing stock has slumped 33.6% since the start of the year and trades 68% below its all-time high set in March 2019. By comparison, the large-cap S&P 500 index has shed 20.5% from its record peak reached in January.  

Disclosure: The author held no positions in the aforementioned securities at the time of publication.

Article Sources
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  1. "Orders and Reviews."

  2. CNBC. "Boeing Delivers 35 Planes in May as it Grapples With Supply Chain Problems."

  3. CNBC. Boeing Aims to Nearly Double 737 Max Production by the End of 2023, Sources Say."

  4. Airbus. "Orders and Deliveries."

  5. The Spokesman Review. "Boeing Still Lags Airbus in Jet Orders and Production, May Soon Resume 787 Deliveries."

  6. Reuters.

    Reuters. "Boeing Delivered 29 737 MAX jets in May, Notches Widebody Orders."

  7. YCharts. "YCharts Fundamental Charting."

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