Boeing Company (BA.US) reaches a key milestone after the "Production Cut" order: the maximum production limit of 38 737s per month.

American Airlines Group Inc. has informed customers that aerospace giant Boeing Company (BA.US) is nearing a key production milestone, which will mark the critical Boeing Company 737 jetliner production capacity returning to normal after last year's shocking high-altitude incident. According to John Plueger, CEO of the largest aircraft financing firm in the United States, Air Lease, Boeing Company is ramping up its final assembly line for the 737 model to establish and achieve a production rate of 38 narrow-body 737 airplanes per month. This production rate is also the highest level allowed by the Federal Aviation Administration (FAA) following last year's incident. Another unnamed customer mentioned that Spirit AeroSystems Holdings Inc., based in Wichita, Kansas, which manufactures the majority of the fuselages for this model, currently delivers about 9 sets of Boeing Company 737 fuselages per week to Boeing Company's factory in Renton, Washington - equivalent to approximately 36 aircraft per month. Before officially adopting the 38 aircraft per month regulatory limit, Boeing Company is testing its assembly line. Spirit AeroSystems Holdings (SPR.US) is Boeing Company's most important supplier, manufacturing most of the fuselages for the Boeing Company 737 series of aircraft. Spirit AeroSystems was also part of Boeing Company's business at one point before being spun off as an independent company. Its main business includes designing and manufacturing aerospace products such as aircraft fuselages, wings, interior components, cockpits, and other core structures and systems of aircraft. After going through a series of crises (including the near-disastrous incident in early 737 Max aircraft last year where panels ruptured in mid-flight), the ability of Boeing Company's factories to return to stable and predictable rhythms will be a key milestone for customers, regulatory agencies, and Boeing Company's investors. The FAA has limited production of the 737 model, Boeing Company's key revenue source, until Boeing Company demonstrates that it has addressed quality control issues and stabilized its supply chain. "I have to say, Boeing Company has made a lot of positive progress," Plueger said. For over a decade, he and his business partner Steven Udvar-Hazy have built Air Lease into one of the world's largest aircraft leasing firms. Boeing Company spokesperson declined to comment on its production plans. A Spirit AeroSystems spokesperson has not yet responded to media requests for comment. Boeing Company CEO Kelly Ortberg's goal is to increase the monthly production rate of Boeing Company Max aircraft to 38 aircraft by mid-year, and then maintain stability in the following months to ensure that the faster pace does not put too much pressure on suppliers or Boeing Company mechanics. Boeing Company then plans to apply for approval from US regulatory agencies later this year for the next phase of production increase, with an initial target of 42 aircraft per month. After that, Boeing Company hopes to make a small, steady increase in monthly production of the 737 every six months. "The key to generating cash will be the continuous increase in 737 Max production capacity," Ortberg stated during Boeing Company's performance conference call in April. At that time, Boeing Company's 737 monthly production rate was "approximately in the low 30s level." Plueger, speaking from the company's headquarters in Los Angeles, stated that since Boeing Company announced its latest production plans in November last year, the 737 Max orders placed by Air Lease have mostly been delivered on time, as has been the case with the 787 Dreamliner model. Although this contrasts with the large-scale aircraft delivery delays that have plagued Boeing Company and Airbus in recent years, the aircraft manufacturer still faces new risks brought about by the new round of tariff measures led by US President Trump and the retaliatory tariff policies of other countries. "Don't get me wrong, Boeing Company is not completely out of the woods yet," Plueger said in the interview. "It needs to continue delivering and maintain a high level of quality production without any real faults, issues, or safety hazards." The Federal Aviation Administration (FAA) has set a production limit of "38 aircraft per month" for the Boeing Company 737 series (especially the 737 MAX); other models such as the 787 Dreamliner, 767, 777, etc., do not have a fixed monthly limit. However, the FAA continues to implement strengthened inspections of the quality system for all Boeing Company models and retains the power to freeze or slow down production of other models at any time, following a near-disastrous event in January 2024. At that time, an Alaska Air Group, Inc. Boeing Company 737 Max with 177 passengers and crew onboard experienced a metal panel detachment shortly after takeoff, leading to the door panel coming off mid-flight, ultimately forcing the aircraft to make an emergency landing. FAA investigators eventually determined that.The door panel was not installed properly at the Boeing Company factory.Boeing Company has been focusing on improving the quality and safety of aircraft since last year, rather than pursuing production expansion as in the past, in response to a serious negative aviation incident that occurred in early 2024, which caused a trust crisis for Boeing Company. Although the 737 MAX incident at the time did not result in a fatal crash, the negative impact caused by the cabin door detachment of Alaska Air Group, Inc.'s 737 MAX9 is no less than a disaster, and the negative public opinion impact on Boeing Company is also no less than a disaster.