Boeing's commercial aircraft deliveries have taken a significant hit in the first quarter of 2024, with the U.S. manufacturer delivering just 83 planes, a sharp decline from the 130 delivered in the same period last year. In contrast, European rival Airbus saw a 12% increase in deliveries, with 142 planes delivered in Q1 2024, up from 127 in the same quarter of 2023.
The stark difference in performance can be attributed to the ongoing safety issues plaguing Boeing, particularly in the wake of a mid-air panel blowout on an Alaska Airlines 737 MAX 9 jet in January. This incident has led to increased scrutiny from the U.S. Federal Aviation Administration (FAA), which has limited Boeing's production of the 737 model to 38 planes per month until the company can demonstrate proper adherence to quality and safety procedures.
Boeing Chief Financial Officer Brian West acknowledged the company's deliberate slowdown in production, stating that once they have it "right," they will ramp up production, with expectations of improved figures in the latter half of the year. "We're deliberately going to slow to get this right," West told a Bank of America conference last month. "We are the ones who made the decision to constrain rates on the 737 program below 38 per month until we feel like we're ready."
Despite the production constraints, the 737 model remains a crucial part of Boeing's lineup, with 67 out of the 83 commercial planes delivered in Q1 2024 being 737s. However, the recent safety issues are not the first setback for the 737 family, as the company faced a temporary production halt following two deadly 737 MAX 8 crashes in 2018 and 2019, which were caused by different issues than the recent incidents.
The COVID-19 pandemic also impacted both Boeing and Airbus, with both companies experiencing dips in deliveries in 2020. However, prior to 2019, Boeing had consistently led in deliveries between the two companies.
As the world's two major competitors in commercial plane manufacturing, Boeing and Airbus have a long backlog of orders, with Airbus reporting 8,598 at the end of 2023 and Boeing reporting 5,591 at the end of March 2024. The limited number of companies capable of producing large jets, coupled with the fact that pilots are trained in either Boeing or Airbus operating systems, makes it difficult for airlines to switch planes, as explained by CNN writer Allison Morrow.
Despite the challenges faced by Boeing, the company has still managed to secure new orders, with 113 new orders in March, including 85 Max 10 aircraft for American Airlines, eight 777X passenger jets for Ethiopian Airlines, and 20 777X jets for an undisclosed customer. However, this figure is still lower than Airbus' 137 new orders in March, with no cancellations.
The ongoing travel boom and the wider shortage of aircraft have contributed to the sustained demand for both Boeing and Airbus planes, despite the supply chain challenges currently holding back production. According to the International Air Transport Association, some 40 million flights are set to carry a record 4.7 billion people in 2024, up from 4.5 billion people in 2019.
As Boeing works to address its safety concerns and improve production, the company faces an uphill battle to regain its position as the leading commercial aircraft manufacturer. Meanwhile, Airbus continues to capitalize on its momentum, with strong delivery numbers and a growing order book. The coming months will be crucial for Boeing as it seeks to restore confidence in its products and ramp up production to meet the ever-increasing demand for air travel.
