New York (AFP) – Boeing reported a smaller loss in the second quarter Tuesday after the company delivered more planes, with its CEO pointing to signs of stabilization in operations. The aviation giant reported a loss of $697 million, compared with a loss of $1.4 billion in the year-ago period. Revenues rose 34.9 percent to $22.7 billion, topping analyst estimates. Boeing delivered the most planes in a second quarter, or in the first half of a year, since 2018, reflecting efforts to improve its quality control operations following a number of safety problems.
Boeing reaffirmed plans to seek in 2025 a production increase for the 737 MAX from the Federal Aviation Administration. That approval stands as a key goalpost in Boeing’s turnaround following a January 2024 Alaska Airlines flight that saw a window panel blow out mid-flight. Chief Executive Kelly Ortberg, who joined the company last August, said he was heartened by the progress but that more work is needed.
“I would say we’re turning the corner,” Ortberg said in an interview on CNBC. “We’ve done a lot of work on the culture. The teams are rallying around that work.” But “we’ve got a lot of work yet to do,” he added. Ortberg said he was “confident” Boeing would be cashflow positive in the fourth quarter, but that the third quarter may be affected by a “big payment” associated with a settlement of a US Department of Justice criminal case related to two fatal 737 MAX crashes in 2018 and 2019. Boeing has previously said it expected to be cashflow positive in the second half of 2025.
Boeing increased production on the 737 MAX to 38 per month during the quarter. Ortberg declined to estimate when the FAA would approve a rate increase to 42 per month, but said the company would be working on the project in the third quarter. Production of the company’s other top-selling jet, the 787 Dreamliner, now stands at seven per month, up from five earlier in the year. Boeing has resumed deliveries to Chinese carriers after they were halted at the height of the trade conflict earlier this year between Washington and Beijing. The two countries have suspended their most onerous tariffs and are now working on a deal, with talks ongoing in Stockholm on Tuesday.
In a letter to employees, Ortberg said the certification of the 737-7 and 737-10 models is taking longer than previously expected due to challenges with anti-ice mechanisms on the plane. “Progress on this solution has taken longer than we expected and we now anticipate that certification for the airplanes will take place next year,” Ortberg said in the letter. Shares of Boeing fell 2.4 percent in morning trading.
© 2024 AFP
