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China Lifts Grounding of Boeing 737 MAX Jets

A Boeing 737 MAX jet landed in China today in what industry experts say is the aircraft's first commercial flight in Chinese skies since Beijing grounded the plane in 2019. That was shortly after two deadly accidents involving 737 MAX jets in other countries in the space of less than six months. Since late 2020, the Boeing jet has resumed operations in the US, Australia and Canada, among other countries.

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Airbus, Bogged Down by Supply Chain Woes, Cuts Delivery Target

Planemaker slows aggressive ramp up of A320 narrow-body as suppliers scramble to hit targets

LONDON—Airbus cut its aircraft delivery guidance for this year and slowed production plans, citing delays in its supply chain that are holding back the European planemaker’s aggressive ramp up targets.

The company will deliver 700 aircraft this year, 20 fewer than it had initially planned, it said on Wednesday. Airbus delivered 297 aircraft in the first half, with some handovers held back by missing or late components.

While it held on to plans to increase production of its bestselling narrow-body family to 75-a-month in 2025, it said production would increase more slowly through 2023. Rates for that aircraft, the A320, will now only reach a rate of 65-a-month in early 2024, about six months behind schedule. Rates are currently at about 50 a month.

“We are late on the trajectory we had given to ourselves,” Airbus Chief Executive Guillaume Faury said on a call with reporters, citing the supply-chain challenges. “We are trying to go as fast as we can.”

Excerpt from WSJ
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Boeing Profit Falls as Executives Point to Turnaround

U.S. manufacturer has increased production and deliveries of its 737 MAX amid supplier bottlenecks

Boeing Co.  said its quarterly profit fell as it awaited regulatory approval to resume deliveries of its 787 Dreamliner and charges continued to mount at its military and space unit.

The company said its second-quarter results showed it was making progress in stabilizing its operations after a series of production and regulatory problems have prevented it from delivering commercial aircraft on time and without quality issues.

“We do believe we’re in the middle of a momentum shift,” Chief Executive David Calhoun said in a call with analysts Wednesday.

Boeing shares were recently trading around even, having climbed more than 3% at one point.

Production of the 737 MAX has reached 31 planes a month, up from 16 a year ago, as it deals with supply-chain challenges such as engine shortages that are also affecting rival Airbus SE, which also reported earnings Wednesday. Boeing has said it stepped up 737 deliveries in June.

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Boeing Needs to MAX-imize Its Recovery

737 MAX deliveries are key if the plane maker is to generate cash this year, but maintaining June’s positive trends won’t be easy

The once-troubled 737 MAX jet now carries Boeing investors’ hopes and dreams.

On Wednesday, the Arlington, Va.-based plane maker reported second-quarter earnings that fell short of Wall Street expectations. Still, free cash flow, which is a more important metric, was better than forecast thanks to a jump in MAX deliveries. If it keeps this going, Boeing should hit its target of positive cash flow for the year for the first time since 2018.

To be sure, defense revenues continued to disappoint and U.S. regulators still haven’t cleared the way for its other key product, the 787 Dreamliner, following a series of defects. But deliveries seem set to resume this summer, and the fallout from the war in Ukraine will probably soon send a wave of cash toward defense contractors.

The fate of the MAX is subject to many more unknowns, both positive and negative. It may be the key driver of Boeing’s stock, which is down more than 50% since the onset of the pandemic but still not an obvious buy. The plane maker is trading at an enterprise value of around 12 times expected 2024 earnings—the year when travel is expected to fully recover. This is in line with pre-Covid valuations, but those were historically elevated.

On the one hand, the MAX is selling better than its detractors predicted. During last week’s Farnborough International Airshow, it garnered 233 orders, including 100 planes by Delta Air Lines —the only top U.S. carrier that hadn’t yet bought it. This compared with 73 orders for Airbus’s  competing A320 family. The A320 remains more popular overall. Counterintuitively, though, this may work in favor of the MAX right now, as airlines are much more likely to get their planes ahead of time. While the A320 has a backlog of around 6,000 orders, the MAX’s is closer to 3,400 due to cancellations in recent years.

Excerpt from WSJ
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