Boeing Faces 787 DreamlinerParts ShortageDue to Russia Sanctions

Boeing faces a shortage of heat exchangers for its 787 Dreamliner aircraft due to supplier RTX's shift in production from Russia to the US and UK. The shortage has led Boeing to warn investors of delayed deliveries, affecting cash flow and airlines.

Salman Khan
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Boeing Faces 787 DreamlinerParts ShortageDue to Russia Sanctions

Boeing Faces 787 DreamlinerParts ShortageDue to Russia Sanctions

Boeing is grappling with a shortage of a critical part for its 787 Dreamliner aircraft, heat exchangers, due to the ongoing impact of Russia sanctions on its supply chain. The shortage is attributed to RTX, a supplier that ceased its Russian operations and shifted production to the US and UK after Russia's invasion of Ukraine in 2022.

Why this matters: The shortage of heat exchangers has far-reaching implications for the global aerospace industry, highlighting the vulnerability of complex supply chains to geopolitical tensions. As a result, airlines and passengers may face significant delays and disruptions, underscoring the need for manufacturers to diversify their supply chains and mitigate risks.

RTX's Collins Aerospace unit was making heat exchangers as part of a joint venture with Hamilton Standard-Nauka in Russia, but ended the venture in March 2022. The company shifted production to factories in Windsor Locks, Conn., and Wolverhampton, U.K., but the new factory lines have not kept pace with Boeing's increased production demands. Heat exchangers are a critical but relatively basic part, akin to a radiator, used to regulate the temperature of electronics and environmental control systems on the plane.

The shortage has led Boeing to warn investors that it won't deliver as many 787 Dreamliners as anticipated this year, affecting its cash flow and impacting airlines and the flying public. American Airlines has blamed Dreamliner delays for its decision to trim some international and long-haul routes this year and next. Boeing Chief Executive Dave Calhoun acknowledged the issue, stating, "When the invasion happened, it got moved, and the capacity of that supplier has not kept pace with us."

Deliveries of the 787 Dreamliner were largely halted for nearly two years due to production and regulatory issues. Boeing didn't deliver any 787s for the first seven months of 2022. In 2023, Boeing rolled out 28 787s, according to AIR, an aerospace-industry research company. The company aims to return to rolling out five 787s a month by the end of 2024.

Boeing is also experiencing a shortage of cabin seating, which is also holding back 787 production. Jet manufacturing was among the sectors more severely affected by sanctions imposed on Russia, a big player in the global aerospace supply chain. The slowdown will sap Boeing's already strained cash flow, with fallout extending to airlines and the flying public as the company works to overcome these supply chain challenges and meet delivery targets for its flagship wide-body jet.

Key Takeaways

  • Boeing faces 787 Dreamliner production delays due to heat exchanger shortage.
  • RTX ceased Russian operations, shifting production to US and UK, causing supply chain issues.
  • Heat exchangers are critical components, regulating temperature of plane's electronics and systems.
  • Delays will impact Boeing's cash flow, airlines, and passengers, highlighting supply chain vulnerability.
  • Boeing aims to return to producing 5 787s/month by end of 2024, but faces cabin seating shortage too.