Boeing not concerned about titanium supply, watching other pinch points

The Boeing logo is pictured at Congonhas Airport in Sao Paulo, Brazil August 14, 2018. REUTERS/Paulo Whitaker/File Photo

SINGAPORE, Feb 14 (Reuters) - Boeing Co (BA.N) is not concerned about a potential disruption to Russian titanium supplies because of tensions over Ukraine, but is keeping a close watch on other industry supply chain pinch points, a senior executive said on Monday.

Boeing relies heavily on Russia's VSMPO-AVISMA (VSMO.MM) for the supply of titanium, a lightweight but strong metal that is used widely in planemaking.

Russia has massed over 100,000 troops near Ukraine's border as it presses demands for a new security arrangement in Europe, prompting U.S. and European officials to threaten a barrage of sanctions if it invades.

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Boeing Commercial Airplanes head Stan Deal said the U.S. manufacturer had diversified its titanium supply chain since 2014, when Russia was sanctioned for its annexation of Crimea from Ukraine, even though titanium was not directly targeted at the time. read more

"We've got a very diverse titanium supply now," he told reporters in a briefing ahead of the Singapore Airshow, which starts on Tuesday.

"I will tell you that diversity gives us an opportunity to work through any disruption in the supply chain relative to titanium."

Securing titanium has been made easier by the fact that fewer jets are being assembled as a result of the coronavirus pandemic, allowing plane makers to stockpile reserves.

Boeing has also reduced production of its 787 wide body planes and paused deliveries due to manufacturing flaws and required inspections and repairs.

Deal reiterated Boeing had no time frame on resuming deliveries and the manufacturer remained in talks with customers on the 787s status.

He said as Boeing and rival Airbus(AIR.PA) ramped up production of narrow body planes as market conditions improved from pandemic lows, his company was alert to possible pinch points in the supply chain.

"I continue to watch casting, forging, those areas," he said. "We're also watching the human capital side of the equation."

Deal said there were some early signs of a market recovery in the Asia-Pacific region, where international passenger traffic in 2021 remained 93% below 2019 levels due to border closures but freight revenues helped keep airlines afloat.

"We are already seeing engagement and discussions with customers in this region," he said.

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Reporting by Chen Lin; Writing by Jamie Freed; Editing by Muralikumar Anantharaman and Tomasz Janowski

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