Boeing falling behind on certifying its 777X, CEO says

By Dan Catchpole

SEATTLE, Sept 11 (Reuters) - Boeing BA.N CEO Kelly Ortberg said on Thursday that the planemaker is behind schedule on certifying the 777-9, its newest widebody jet.

The company expects to deliver the first 777X jet in 2026, six years later than anticipated when the program was launched in 2013.

A "mountain of work" remains to certify the plane, but no new technical problems have been identified, Ortberg said while speaking at the Morgan Stanley Laguna Conference.

But "even a minor schedule delay on the 777 program has a pretty big financial impact" for the company, which has already lost several billion dollars on the program, he noted.

Inflationary pressure across Boeing's supply chain is affecting airplane pricing, he said.

However, he does not expect any supply chain problems to prevent the company from increasing production of its best-selling 737 MAX to 42 aircraft per month by the end of the year, up from the current federally imposed cap of 38, Ortberg said.

The company still has to decrease how much work has to be redone on the 737 program before Boeing can increase output, he noted.

Boeing has made good progress on design changes needed to certify the 737 MAX 7 and MAX 10, the aircraft's smallest and largest models, Ortberg said, adding that "it's frustrating that it took, it's taken us this long..."

The planemaker needs to increase production of its cash-cow 737 MAX to get back to positive cash flow.

However, the company will not increase the rate until it is ready, if not, "We'll wait a month," he said. "A month will not matter in the big scheme of things, and losing stability will matter."

Rushed rate increases in previous years roiled Boeing's production system and supply chains, costing the company billions and straining relations with customers and suppliers.

Paying down debt is a top priority when the company returns to profitability, Ortberg said, noting that the company took on too much debt dealing with its crises in recent years.

The company recently raised the 787 production rate from five a month to seven, and it plans to go to eight a month in the near future, he said. "We're hopeful to be at 10 (a month) next year."

The Trump administration has pressed major economic partners to buy Boeing airplanes as it pushes to reset America's trade relations. Japan, South Korea and other countries have ordered dozens of Boeing planes as part of trade deals.

"There's no better way to correct the balance of trade than to buy a large number of aircraft," the Boeing CEO said, adding that many of the announcements have been driven more by pent-up demand for airplanes.