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January 26, 2020

Boeing may again cut 787 plane production


January 26, 2020

New York: Boeing, still in crisis mode due to the grounding of the 737 MAX, is considering further production cuts to another key commercial plane, a person close to the matter said.

The move could affect the 787 Dreamliner plane, which is bigger than the MAX and was the company´s most-delivered jet in 2019 while MAX deliveries were halted.

In October, Boeing trimmed 787 output to 12 from 14 per month, describing the move as necessary given lower orders from China.

The company may cut the 787 output further, the source said, confirming a report on CNBC. Boeing would maintain a "disciplined rate management process taking into account a host of risks and opportunities," a company spokesman said.

"We will continue to assess the demand environment and make adjustments as appropriate in the future." Former chief executive Dennis Muilenburg said in October that Boeing expected the lower 787 production rate for two years and stressed that the company was still bullish on the long-term prospects for the jet, which can seat between 250 and 335 people. Boeing is expected to benefit from the US-China trade agreement signed last week that commits China to increased purchases of $78 billion in manufactured goods such as aircraft.

Boeing on Monday signaled it does not expect to receive regulatory approval to return the MAX to service before mid-2020, a later timeline than had been expected and one that has sharpened concerns about a deeper economic hit from the crisis.

The company is set to update investors when it reports earnings on January 29. Separately AFP reported that the US air safety regulators could clear the Boeing 737 MAX to return to service before mid-year.

The plane has been grounded since March following two deadly crashes. On Tuesday, Boeing announced that it did not expect to win regulatory approval until mid-2020. An FAA spokesman reiterated that the agency has set no timeframe for certification, but indicated the process has moved forward from December.

"While the FAA continues to follow a thorough, deliberate process the agency is pleased with Boeing´s progress in recent weeks toward achieving key milestones," the FAA spokesman said.

In December, the FAA publicly castigated Boeing for targeting an unrealistic return to service timeframe that seemed to be "designed to force FAA into taking quicker action." A spokesman for American Airlines confirmed that the carrier had discussed the MAX with the FAA but declined to comment on the conversation.

United Airlines and Southwest Airlines, two other US carriers that fly the MAX, did not immediately respond to a request for comment.

Boeing suspended production on the MAX this month but Chief Executive David Calhoun said this week the company plans to begin ramping up 737 MAX production ahead of winning regulatory approval to resume service on the plane.

Calhoun, who began as CEO earlier this month, has highlighted restoring Boeing´s reputation with regulators, customers and other stakeholders as an imperative as he tries to the turn the company around.

In another related news report by AFP, high wind forced Boeing to again delay the inaugural flight of its long-haul 777X aircraft on Friday.

"We´ll try again tomorrow," Boeing said on Twitter, aiming for a 10:00 am (1800 GMT) flight from the airfield in Everett, Washington near the company´s headquarters.

"Wind levels prevented us from flying today. We will continue to provide updates on our website and through social media."

The new aircraft in its blue and white company colors, remained on the tarmac of Boeing Field, in the suburbs of Seattle where the wind was blowing hard enough to shake the camera in place to document the flight live on social media.

This first flight -- the start of a whole battery of flight tests -- had been scheduled for Thursday but was pushed back due to poor weather, common in this region in winter.

The 777X originally was due to take to the skies for the first time in mid-2019, but was postponed due to problems with the new engine, manufactured by General Electric, and difficulties with the wings and software. If the test flights go well, Boeing will officially file for approval of from the Federal Aviation Administration (FAA).