Supply-chain snags led Boeing Co. to recently pause 737 MAX production for about 10 days, people familiar with the matter said, complicating the plane maker's ability to satisfy airlines' demand for new aircraft.
Boeing's problems with delivering new narrow-body jets have frustrated customers such as Ryanair Holdings PLC as carriers seek to capitalize on surging air travel demand, and hindered the plane maker's efforts to generate cash to pay down debt.
Boeing is expected to burn through around $3.6 billion in cash during the first half of 2022, according to analysts' estimates, though the company forecasts it can have positive cash flow for the year.
That outlook hinges in large part on the number of MAX deliveries and the resumption of 787 Dreamliner deliveries.
Boeing's recent 737 production pause occurred in May, people familiar with the matter said. Work inside the factory didn't halt during the slowdown, one of these people said.
Chief executive officer David Calhoun said supply constraints have kept Boeing from increasing production and delivering more 737s.
"It's a relatively hot market," he said at an investor event Friday. "Right now, demand is significantly better than supply."
Boeing's 737 factory output has lagged behind its target production rate of 31 a month, with the manufacturer minting 26 of the new jets in March and 21 in April, according to estimates by Ascend by Cirium.
The aviation data provider estimates Boeing produced 20 MAX jets last month through May 26.
Boeing is running into difficulties reducing its inventory of completed 737 MAX jets, totaling some 320 at the end of the first quarter.
Planes that wound up in storage during a nearly two-year grounding of the jet are taking longer than anticipated to prepare for delivery, a person familiar with 737 production said.
In addition to making required updates and fixes to the stored planes, Boeing is in some cases repainting or overhauling interiors for customers of planes whose original buyers have walked away, this person said.
On Friday, Mr. Calhoun said the modification work on stored 737 MAX jets was becoming easier to replicate. "We're beginning to get a little more predictable on that front, and that's a big deal."
According to preliminary Cirium data, Boeing delivered 24 of its 737 MAX jets in May, one third of them from inventory.
Boeing and rival Airbus SE are due to release final May delivery numbers later this month. While analysts expect deliveries of the European plane maker's A320neo family jets to also fall short of its targeted monthly production of around 50, Airbus is still producing more jets than Boeing.
Both companies are struggling with supply-chain issues, but Boeing has delivered fewer planes than its European rival as airline traffic recovers from pandemic-driven lows.
Boeing delivered 109 MAX jets through April, compared with the 146 A320neo-family aircraft Airbus handed over to customers in the first four months of the year.
Boeing finance chief Brian West said at an investor event last month that the company wants to avoid building planes with missing parts that need to be added later. Four years ago, supplier bottlenecks led to a pileup of unfinished aircraft.
Mr. West said the company will slow or even pause production if it is missing parts. He said Boeing was focused on maintaining consistent production and deliveries.
"We have to stay disciplined, and we have to drive stability," he said.
The delivery delays have led Ryanair to cut flights from its summer schedule.
Michael O'Leary, the European discount carrier's CEO, said he could understand challenges manufacturing new aircraft.
"But aircraft that you built and made two years ago. I don't understand why … you are taking two or three month delays on that," he told analysts in May.
Ryanair has received more than 60 of the 200 MAX jets it ordered.
Boeing has been working with suppliers to make sure they are properly staffed as it ramps up production, the person familiar with 737 production said.
Boeing has about 10 suppliers currently facing material and labor shortages, this person said. Around 600 primary suppliers work on the MAX program.
Boeing shares are down about 30% this year, underperforming aerospace peers and the S&P 500 index, which has fallen around 14% this year.
Airbus, whose shares are down around 3% this year, is also facing supply constraints.
CEO Guillaume Faury said last month there were "a lot of challenges" in its supply chain, partly due to the impact of Russia's invasion of Ukraine and disruption from China's zero-Covid policy.
But he said he was confident that it could proceed with plans to increase production to 75 A320s a month by 2025--its highest ever rate.
An Airbus spokesman said the company had made some adjustments to its delivery plans, and that the plane maker is working toward its goal of delivering 720 aircraft overall by the end of the year.
The European company in April delivered 36 of its A320 family of aircraft. Airbus's spokesman said deliveries may fluctuate month to month, and that it was sticking with its full year delivery guidance.
Benjamin Katz contributed to this article.
