(Reuters) – Supply pressures may hinder Boeing Co from making about 50 MAX jets per month at least by 2025, from about 31 currently, according to analysts, after the planemaker on Wednesday laid out a plan to speed up its recovery from successive crises.
“We think there will be a healthy level of skepticism as to whether Boeing can actually hit these targets, especially over the next year or so as supply chain issues are likely to remain a challenge,” Vertical Research Partners analyst Robert Stallard said.
Boeing at its first public investor meeting since 2016 said it expects to deliver 800 commercial jets at least by 2025, pegging the MAX and 787 production per month at 50 and 10, respectively. It expects annual cash flow to jump to about $10 billion by 2025 or 2026.
The company expects to deliver 375 MAX planes and generate cash between $1.5 billion and $2 billion this year, after burning cash for three years due to overlapping crises caused by two MAX jet crashes and the pandemic.
“On the supply side, (production targets) will require a significant ramp up from the castings/forgings suppliers, which was a challenge even prior to the pandemic, and remains even more of a challenge today,” Credit Suisse analyst Scott Deuschle said.
Deuschle added that he will take commentary from the company on making about 50 MAX jets per month “with a grain of salt”.
Boeing executives were optimistic about the forecasts, which also outline a goal of delivering 400-450 MAX planes next year.
“We believe the plan that we have out here, the guidance that we’ve provided is doable,” said Chief Executive David Calhoun. “If we didn’t, we wouldn’t put it up.”
(Reporting by Abhijith Ganapavaram in Bengaluru; Editing by Shounak Dasgupta)
