Boeing Company (NYSE: BA) experienced a significant decline in aircraft deliveries in the first quarter of 2024, reaching the lowest level since mid-2021. This situation stemmed from an incident of door plug explosion on a 737 Max 9 aircraft in January, leading the company to face stricter scrutiny thereafter.

Delivery Decline

As of March 31, Boeing delivered 83 aircraft over the past three months, with the majority being 737s. This marked a substantial decrease compared to 157 deliveries in the previous quarter and 130 deliveries in the same period last year. In March alone, Boeing delivered 29 aircraft. Meanwhile, Airbus (EPA: AIR) delivered 142 aircraft in the first three months of this year, with 63 delivered in March alone.

New Orders Increase

Despite the decline in deliveries, Boeing's customers continued to place orders for new jet aircraft with the company. Last month, Boeing recorded orders for 111 new aircraft, including 85 737 Max aircraft ordered by American Airlines, offset by two canceled orders.

Quality Control Issues

Since the incident on Alaska Airlines Flight 1282 on January 5, federal investigators have pointed out the lack of a bolt securing the door plug. Subsequently, the Federal Aviation Administration inspected Boeing's 737 Max production and prohibited the aircraft manufacturer from increasing the production rate of jets until its quality control procedures are approved.

Reduced Yields Enhance Quality

Boeing executives stated that they are slowing down production to improve quality control and avoid so-called out-of-sequence work. Boeing Chief Financial Officer Brian West stated at a conference with Bank of America last month that the company would limit 737 project production to below 38 aircraft per month until they are ready.

Boeing's delivery delays prompted criticism from some of its largest airline customers' CEOs, leading the company's CEO, Dave Calhoun, to announce his resignation last month, effective by the end of the year. Boeing also replaced its board chairman and head of the commercial airplane unit.

Alaska Airlines announced last week that it received $160 million in compensation from Boeing for the temporary grounding of aircraft following the incident.

Boeing plans to report its first-quarter performance and update investors on April 24.