In this article, Boeing CEO Kelly Ortberg discussed the company’s progress in its recovery efforts. He mentioned that Boeing is focusing on core businesses and increasing production following a series of safety and manufacturing crises that led to its sixth consecutive annual loss. Ortberg stated that the company expects 737 Max deliveries to reach the “upper 30s” this month, up from 17 in December. He expressed optimism about Boeing turning cash-flow positive in the second half of the year and reaching a production rate of 38 Max aircraft per month.
Boeing’s shares rose by 1.5% on Tuesday. Ortberg, a seasoned aerospace executive who was brought out of retirement by Boeing, emphasized the company’s commitment to addressing its organizational culture. He also mentioned plans to sell off units like the Jeppesen navigation business to streamline operations and focus on key areas for growth.
Boeing reported a loss of $3.86 billion in the last quarter of 2024, with significant charges in its commercial aircraft and defense and space units. The company faced challenges due to a machinist strike that disrupted production and delivery schedules, resulting in a cash burn of about $3.5 billion in the fourth quarter. Boeing anticipates a similar cash usage in the first quarter of the current year.
Despite setbacks caused by crashes, the pandemic, manufacturing issues, and cost overruns, Boeing is working towards stabilizing production at 38 aircraft per month. Ortberg highlighted the need to demonstrate safety and quality at this production rate before potentially increasing output to around 42 aircraft per month by the end of the year.
Boeing’s annual loss for 2024 amounted to $11.83 billion, the largest since 2020 when the 737 Max grounding and the pandemic impacted the company. Ortberg acknowledged the challenges faced by Boeing but expressed optimism about the progress being made to turn the company around. The defense unit’s revenue declined by 20% in the quarter, with significant charges incurred.
Boeing is in discussions with Elon Musk’s SpaceX to expedite the delivery of Air Force One aircraft and reduce costs in the program. The company’s commercial aircraft unit also experienced a drop in revenue. Boeing’s fourth-quarter loss was higher than analysts’ expectations, attributed to the strike and charges incurred during the period.
Despite challenges, Boeing resumed production of the 737 Max and 777X aircraft, with plans to certify additional models in the Max family. While airline CEOs have shown support for Boeing, customers are still affected by delivery delays. American Airlines and Ryanair have made adjustments to their schedules due to Boeing’s delays in delivering new aircraft.
In conclusion, Boeing continues to navigate challenges but remains focused on recovery and growth in its core businesses.
