Boeing CEO says fixing supply chain constraints is 'frustratingly slow'

(Reuters) -Boeing Co. CEO Dave Calhoun on Friday said progress on resolving supply chain problems has been "frustratingly slow" even as airlines' demand for planes has bounced back to pre-pandemic levels.

Boeing has seen improvements in certain elements of its supply chain, such as engine forgings and castings, Calhoun said.

But the ability of aircraft makers like Boeing and European rival Airbus to meet customer demand for new planes will still be constrained "five years from now," he added.

"We've got to be smart about how we manage supply against that demand spike," Calhoun said at a Bernstein conference.

Visibility into some problems has improved, Calhoun said. Boeing regularly tracks 25-30 parts from a subset of suppliers that have previoulsy faced production headwinds.

But surprise issues can still crop up from "the supplier who lost some experience, talents, talents, somewhere along the way didn't replace them in kind," he said. "You get a notice of escape or a defect and I can't make next month's delivery."

Boeing and Spirit AeroSystems - which makes the 737 MAX fuselage - are currently grappling with a bracket installation defect that has slowed deliveries of the bestselling MAX 8 model.

That problem "probably cost us 25 airplanes in the air" but is "manageable" and will not prevent the company from ramping up production to 38 jets by the end of the year, Calhoun said.

Last month, Calhoun said it could take until the end of 2024 to iron out supply chain constraints, echoing comments by Airbus Chief Executive Guillaume Faury, who has said production would rebound to pre-pandemic levels at the end of 2024 or even in 2025.

(Reporting by Valerie InsinnaEditing by Jason Neely and Frances Kerry)

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