August 8, 2018 / 2:09 PM / 6 days ago

Boeing sees more narrowbody delivery delays in third quarter

SEATTLE (Reuters) - Boeing Co (BA.N). the world’s largest planemaker, said on Wednesday it expects delivery delays of its hot-selling narrowbody aircraft to continue deeper into the year as it grapples with delays of fuselages and engines from suppliers.

A Boeing logo is pictured during the European Business Aviation Convention & Exhibition (EBACE) at Geneva Airport, Switzerland May 28, 2018. REUTERS/Denis Balibouse

“You saw some of that making its way into 2Q deliveries a little bit, and you’ll see more of that in Q3 where we’ll expect to have deliveries lower than our production rate,” Boeing Chief Financial Officer Greg Smith told an analyst conference.

“And so therefore you’ll see a much more heavily weighted Q4,” Smith added. “Those jobs are now in our factory and each one of those suppliers is getting more on track,” he said.

The top-selling 737 is powered by engines made by French-U.S. venture CFM International, co-owned by France’s Safran (SAF.PA) and General Electric (GE.N) of the United States. CFM has had some industrial problems in producing its new LEAP engine for the 737 MAX and some aircraft for rival Airbus (AIR.PA).

Boeing is also grappling with delays on fuselages supplied by Wichita, Kansas-based Spirit AeroSystems (SPR.N). Spirit, which makes some 70 percent of the structure of the 737, has faced disruptions this year in its own supply chain as parts makers scrambled to meet soaring demand. Spirit has said it is working to get back on track by mid-2018.

Boeing aims to reach production of 57 of the narrow-body jets per month in 2019.

Smith also said Boeing continues to spend a lot of time talking to airlines about a possible new mid-market jet it says will fill a niche between the bread-and-butter single-aisle planes that dominate most fleets and the bigger long-range, twin-aisle jets.

Discussions continue to focus on the plane’s economics and how airlines could use the aircraft to optimize their product lines, Smith said.

Reporting by Eric M. Johnson in Seattle; Editing by Frances Kerry

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