By Eric M. Johnson and Abhijith Ganapavaram
(Reuters) – Boeing Co said on Wednesday it was halting production of 777x through 2023 due to certification problems as well as weak demand for the wide-body jet, and disclosed $1.5 billion in abnormal costs related to the program.
For its troubled 787 Dreamliner program, the planemaker said it has submitted a certification plan to the U.S. regulator in a step toward resuming deliveries halted for nearly a year by an industrial snafu costing about $5.5 billion.
The 787 Dreamliner, along with the 737 MAX, are vital to the financial health of Boeing, which is trying to bounce back from successive crises.
It has been producing the 787 jets at a low rate while it undertakes inspections and repairs for structural flaws amid intense regulatory scrutiny.
Boeing has “completed the required work on initial airplanes and is conducting check flights”, Chief Executive David Calhoun said, a development that should cheer airlines that have cut back on flying long routes due to delivery delays.
Calhoun did not specify on Wednesday when Boeing would resume 787 deliveries. Reuters reported last week it had advised key airlines and parts suppliers that the deliveries would resume in the second half of this year.
Boeing also confirmed reports of a delay in handing over the first 777X jet to 2025, but said it remains confident in the program.
The pause in 777-9 production will help Boeing to add 777 freighter capacity starting in late 2023, Calhoun said.
Reuters reported last month that the Federal Aviation Administration had warned Boeing that existing certification schedules for the 737 MAX 10 and 777X were “outdated and no longer reflect the program activities.”
The planemaker said in its first-quarter earnings report that it was on track to generate positive cash flow for 2022 as it ramps up deliveries of 737 MAX aircraft.
(Reporting by Eric M. Johnson in Seattle and Abhijith Ganapavaram in Bengaluru; Editing by Arun Koyyur)
