New York (AFP) – Boeing pointed Tuesday to broad-based revenue growth as evidence its comeback remains on track even as a $280 million hit from the US presidential plane contract worsened a quarterly loss. Shares rallied following Boeing’s latest update on a multi-year effort to turn the company around after several troubled years marred by safety problems.
“We’re halfway through the year, and I’m very pleased with our progress,” said Boeing Chief Executive Officer Kelly Ortberg, who emphasized efforts to rebuild credibility with customers and Federal Aviation Administration (FAA) officials. “We worked hard to build this trust from the FAA and we take this responsibility very seriously,” Ortberg told analysts.
In the second quarter, the US aerospace giant scored an eight percent increase in revenues to $24.6 billion on increased commercial plane deliveries and higher volume in defense, space, and security. Boeing reported a second-quarter loss of $428 million, smaller than in the year-ago period, but bigger than projected by analysts. The results included $280 million in losses on the VC-25B program for the presidential plane, Air Force One, which has been beset by delays and cost overruns. The latest Air Force One expenses are for “additional production and certification resources,” Boeing said in its earnings statement.
The original 2018 contract was to modify and outfit two 747-8 aircraft for presidential use. The contract aimed for initial delivery of an Air Force One aircraft by December 2024. The current timeframe is for delivery in mid-2028 and mid-2029. “The good news is that we’re through the design phase of that program, and now we’re modifying and testing the airplanes,” Ortberg told CNBC. “It’s very important to our customer that we deliver that airplane on time. We’re going to put more resources on to ensure that we do that.”
Boeing described certification efforts for new 737 MAX and 777 planes as on track with US air regulators. In early July, Boeing unveiled new 737 MAX production at a “North Line” in Everett, Washington, designed to enable the company to further ramp up plane output. In the second quarter, Boeing “began transitioning production to 47” 737 jets per month, it said Tuesday.
Ortberg told analysts he did not foresee problems with Boeing’s supply chain in ramping monthly MAX production to 52 jets. “I think it’s going to get harder as we go from 52 to 57 and beyond that. We’ll just have to see how well we’re all collectively doing,” Ortberg said. “But look, we’re on our plan. Our plan’s working.”
Boeing is also targeting a rate increase on the 787 Dreamliner from the present eight per month to 10. While Boeing has made progress in obtaining FAA certifications of new seats for some aircraft, that process has delayed some deliveries, Ortberg said. Boeing also lagged its target for receiving engines from General Electric Aerospace for the first half of 2026, resulting in slowed production for a stretch in April. Ortberg said the company was working with GE to improve deliveries, describing the engine provider as “pretty confident” in a boost.
“Looking at delivery numbers, Boeing is clearly on the right track,” longtime aviation analyst Richard Aboulafia told AFP ahead of Tuesday’s report. On Monday, the FAA released a preliminary directive ordering inspections on more than 450 US 737 MAX jets over potential faulty installation of passenger seats. The safety regulator said incorrect installation can lead seats to disengage from seat tracks, which “could result in injury to passengers and crew during an emergency landing or could block the aisle, which could slow evacuation.”
Shares of Boeing jumped 4.6 percent by midday.
© 2024 AFP
