Boeing CEO warns of airline supply constraints, U.S.-China trade By Reuters

By Eric M. Johnson and Tracy Rucinski

SEATTLE/CHICAGO (Reuters) -Boeing Co Chief Executive Dave Calhoun on Thursday pointed to potential “supply constraints” beginning in the summer after a “more robust” recovery from the coronavirus-related downturn than he had imagined.

Speaking at a Bernstein virtual conference, Calhoun also said he expects Boeing (NYSE:) will be able to deliver the “lion’s share” of roughly 100 787 aircraft sitting in inventory due to production defects and weakened demand.

With U.S. leisure travel going “gangbusters” and carriers needing to rehire and rebuild their networks and supply chains, Calhoun pointed to likely “supply constraints for a while.”

“I think that will mean it’s a healthy recovery and they’ll get back to former pricing levels sooner rather than later,” Calhoun added.

Boeing is working to emerge from a safety scandal following two deadly crashes of its 737 MAX airliner and an air travel collapse caused by the pandemic. It, meanwhile, is trying to decide the timing of its next new jet program, a multibillion-dollar dilemma that has sparked an internal debate and put the future of the largest U.S. exporter on the line, industry insiders say.

Calhoun said it would not be “all that long” before Boeing makes an announcement on its plans, but said the planemaker is not rushing the decision.

Regardless, Calhoun said efficiency gains on the aircraft would have to be found during design and assembly, as the next quantum leap in engine technology remains years away.