Boeing commits to strengthening quality after better-than-expected results

(New York) The American aircraft manufacturer Boeing unveiled results above expectations for the fourth quarter of 2023 on Wednesday, also committing to improve the quality of its aircraft after the incident on an Alaska Airlines flight.

In a message addressed to the group’s employees and sent to the press, the group’s boss, Dave Calhoun, affirmed that he remained focused on “the actions” carried out “as a company to strengthen quality at Boeing”.

“We will go slowly, we will not rush the system and we will take our time to do things correctly,” he noted.

Between last October and December, the group earned a turnover of $22.02 billion and recorded a net loss of $23 million. The FactSet consensus expected 21.18 billion and a loss of 188 million respectively.

Reported per share and excluding exceptional items – a benchmark for the markets – the net loss stood at 47 cents, less than analysts’ expectations (loss of 78 cents).

Over this period, the aircraft manufacturer delivered 157 commercial aircraft and received net orders for 611 aircraft.

For the entire 2023 financial year, turnover reached $77.79 billion and net loss $2.24 billion.

Boeing suffered a series of quality problems during the year that slowed its production rate for several months and, consequently, the number of its deliveries.

Limited production

When presenting its quarterly results at the end of October, the aircraft manufacturer decided to lower its forecast for annual deliveries of the 737, to count on 375 to 400 units delivered in 2023, instead of the 400 to 450 previously expected. In the end, he delivered 396.

The group nevertheless managed to achieve its production rate objectives at the end of 2023: five 787 aircraft and 38 737 aircraft per month (compared to 31 at the start of the year).

Regarding the 737 family, the group is targeting production of fifty aircraft per month by 2025/2026. But this could be thwarted by the decision on January 24 of the American civil aviation regulatory agency (FAA) which prohibits any expansion of the production of its flagship aircraft.

This decision followed the incident on January 5, when a cabin door of an Alaska Airlines Boeing 737 MAX 9 flying from Portland, Oregon to Ontario, California came loose in flight.

The 171 aircraft with this configuration, out of the 218 Boeing 737 MAX 9 delivered to date, have been grounded by the FAA. On January 24, it published a “vast” maintenance and inspection program which allowed these devices to be gradually returned to service.

Alaska Airlines was the first, with a flight Friday afternoon.

In these circumstances, the group has not communicated forecasts at this stage concerning its 2024 financial year nor its pre-existing 2025/2026 objectives.

In particular, it is counting on ten billion dollars per year in cash flow by 2025/2026, but relying on a higher production rate.

“We often take advantage of this time of year to share or update our financial and operational goals, but now is not the time,” Calhoun noted in his letter to employees.

“We have a significant challenge ahead of us,” he added. But “we have every confidence in our recovery,” he assured.

In electronic trading before the opening of the New York Stock Exchange, Boeing shares rose 1.77%.


Leave a Comment