Delays Plague Effort to Boost 737 Output

Boeing Co. said production snags continue to impede deliveries of its updated 737 jetliners, a family of revamped aircraft that were intended to showcase advanced manufacturing techniques.

Official certification of the “next-generation” 737s by U.S. and European aviation authorities has taken longer than expected, said Boeing spokeswoman Susan Bradley. In addition, the rapid increase in production has created parts shortages, behind-schedule work and overtime.

Boeing, the world’s biggest aircraft maker, has delivered eight of the new 737s, compared with the 20 it expected to have in airlines’ hands by March 31, Bradley said. About 55 of the twin-engine jets are waiting for testing and final work, she said. The company originally aimed to deliver a total of 115 aircraft, including the 737s, in the first quarter.

“They are still experiencing quite a bit of difficulty in the amount of rework required on the planes once they leave the factory,” said Peter Jacobs, an analyst with Ragen MacKenzie Inc., who has an “accumulate” rating on the company. “The company is going to have difficulty meeting its goal.”

Boeing delivered a total of 61 planes as of the end of February, said Peter Aseritis, an analyst at Credit Suisse First Boston. That means 54 aircraft would have to be made this month to reach the target.

Seattle-based Boeing will provide its monthly update of production problems on the 737 and 747 assembly lines today. The briefings began last autumn when the bottlenecks surfaced, contributing to the company’s full-year loss of $178 million. It was the first loss in 50 years.

The aerospace company doubled overall production of commercial aircraft in 18 months and has said it will reach its peak of 43 planes a month by the third quarter of this year. Production was increased to keep up with a record order book of $121.6 billion.

Boeing stock slipped $1.81 to close at $51.63 on the New York Stock Exchange.