Spirit Aero’s 3Q 737 Max Deliveries Recover from 2Q Lows Despite Yearly Decline

Spirit Aerosystems

Spirit Aerosystems, a leading aerostructure manufacturer, reported a sequential improvement in its 737 Max shipset deliveries during the third quarter, though year-over-year numbers were down. Boeing’s updated inspection processes and ongoing labor issues have continued to impact production timelines and operations.

Key 737 Max Delivery Updates

• 3Q Deliveries: Spirit delivered 64 737 Max shipsets, a recovery from the 27 units in the second quarter, which had been delayed due to Boeing's stricter fuselage compliance standards.
• Year-Over-Year Decline: Deliveries fell 23% compared to the same quarter in 2023, with year-to-date deliveries down by 46%.

Widebody and Airbus Deliveries

• 787 Dreamliner: Deliveries dropped 36% sequentially to nine shipsets, though this remained flat year-over-year.
• Airbus Programs:

1. A320: Shipset deliveries rose 19% year-on-year to 153 units, but were lower than the prior quarter.
2. A350: Deliveries increased 8% year-on-year to 13 units, though also declined sequentially.

Spirit’s Airbus operations are being wound down as the company works toward reacquisition by Boeing.

Labor Challenges and Inventory Issues

• Boeing Strike: The work stoppage at Boeing’s Pacific Northwest facilities has disrupted Spirit’s widebody programs, particularly the 767 and 777.
• Employee Furloughs: Spirit announced furloughs for 700 employees in October, citing excessive inventory buildup. The company warned of further layoffs if the strike continues into December.

Financial Performance

Spirit reported a third-quarter loss of $477 million, widening from $204 million a year earlier. Revenues remained flat during the same period, reflecting ongoing production challenges and disruptions.

Outlook

While sequential improvements in 737 Max deliveries signal progress, the company faces persistent challenges from inventory buildup, labor disputes, and production delays. Spirit’s future performance is tied closely to Boeing's recovery and resolution of labor strikes, alongside its planned operational integration with Boeing.