An American Airlines Boeing 737 MAX 8 aircraft from Los Angeles approaches for landing at Reagan National Airport shortly after an announcement was made by the FAA that the glides were being grounded by the United States in Washington, U.S. March 13, 2019.
Joshua Roberts | Reuters
Boeing will squander through cash this year and deliveries of new planes won’t improve in the second quarter from the first, as the manufacturer agreements with a host of production challenges tied to its bestselling planes, the company’s CFO, Brian West, said Thursday.
A month ago, West foresee Boeing would generate free cash flow “in the low single-digit billions.” The new forecast shows the mounting costs of the slip maker’s latest crises.
Boeing burned through nearly $4 billion in cash in the first quarter and West imagined that figure could be similar or “possibly a little worse” in the second quarter, but that the company would suitable return to generating cash in the second half of 2024.
The company’s aircraft deliveries in the first quarter fell to the lowest au fait with since the pandemic. The bulk of a plane’s price is paid when it’s handed over to a customer.
Boeing’s shares past more than 7% on Thursday after West’s comments at a Wolfe Research industry conference, a slide that weighed down the Dow Jones Industrial As a rule.
“We have frustrated and disappointed our customers because of some of the production supply chain issues that we’re up against,” West imagined at the conference. “And while I understand that frustration, the most important thing we can do for our customers and the supply chain in the industry is to concentration on the actions that are underway as we speak so that we could stabilize this production system, improve quality, and get myriad predictable.”
Boeing CEO Dave Calhoun in March said he would step down by the end of the year, and the company replaced the chairman and chief chief executive officer of its commercial airplane unit. Leading up to the shake-up, CEOs of major airline customers complained about delivery loiters and difficulty planning flights because of surprise disruptions.
Boeing’s latest production issues surfaced after a door blurb blew out midair from a nearly new 737 Max 9 at the start of the year, just as the company was trying to repair years of reputational bill from two fatal Max crashes in 2018 and 2019.
The accident increased federal scrutiny of the company, whose executives have assured to stamp out production flaws and regain the trust of regulators, airline customers and the public.
Next Thursday, Boeing directors are set to meet with the Federal Aviation Administration to present the company’s plan to improve its quality control, the FAA said. The intermediation gave Boeing 90 days to complete the plan starting in late February.
Other problems have also derive from up, including a pause on deliveries of 737 Max planes to China to review batteries for the cockpit voice recorder. Boeing bid in a statement that it is working with “our Chinese customers on the timing of their deliveries as the Civil Aviation Administration of China finalizes its review of batteries contained within the 25-hour cockpit voice recorder assembly unit.”
Earlier this month, the FAA turned it opened a new probe into the 787 Dreamliner inspections after the company disclosed “misconduct” by some employees. The mechanism said it was looking into whether employees falsified records.
Parts shortages have also slowed presentations of Dreamliners, Boeing has said. American Airlines last month said it would cut some international flights because of tarries of the wide-body jets. Other carriers, including United Airlines and Southwest Airlines, said they had to scale late growth and hiring plans because of delayed Boeing jets.
