An American Airlines Boeing 737 MAX 8 flight from Los Angeles approaches to land at Reagan National Airport shortly after the FAA announced that the planes were grounded by the United States in Washington, U.S., on the 13th. March 2019.
Joshua Roberts | Reuters
boeing will burn through cash this year and deliveries of new planes will not improve in the second quarter from the first, as the manufacturer faces a series of production challenges related to its best-selling planes, the company's chief financial officer said on Thursday, Brian West.
A month ago, West forecast that Boeing would generate free cash flow “in the single-digit billions.” The new forecast shows the rising costs of the plane maker's latest crises.
Boeing burned nearly $4 billion in cash in the first quarter and West said that figure could be similar or “possibly a little worse” in the second quarter, but the company would likely return to generating cash in the second half of 2024. .
The company's aircraft deliveries in the first quarter fell to the lowest level since the pandemic. Most of the price of an airplane is paid when it is delivered to the customer.
Boeing shares fell 5% in midday trading after West's comments at a Wolfe Research industry conference.
“We have frustrated and disappointed our customers because of some of the manufacturing supply chain issues we are facing,” West said 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 focus on the actions that are underway as we speak so that we can stabilize this production system, improve quality and become more predictable.”
Boeing CEO Dave Calhoun said in March he would resign at the end of the year and the company replaced the president and CEO of its commercial aircraft unit. Before the restructuring, CEOs of major airline customers complained of delivery delays and difficulties planning flights due to surprise disruptions.
Boeing's latest production problems emerged after a door plug exploded in the air of a nearly new 737 Max 9 earlier this year, just as the company was trying to repair years of damage to its reputation from two fatal Max crashes in 2018 and 2019.
The accident increased federal scrutiny on the company, whose executives have vowed to eliminate production defects and regain the trust of regulators, airline customers and the public.
Next Thursday, Boeing leaders will meet with the Federal Aviation Administration to present the company's plan to improve its quality control, the FAA said. The agency gave Boeing 90 days to complete the plan starting in late February.
Other issues have also arisen, including a pause in deliveries of 737 Max aircraft to China to check cockpit voice recorder batteries. Boeing said in a statement that it is working with “our Chinese customers on the timing of their deliveries as the Civil Aviation Administration of China completes its review of the batteries contained in the 25-hour cockpit voice recorder assembly unit.” “.
Parts shortages have also slowed deliveries of the 787 Dreamliners, Boeing said. american airlines Last month it said it would cut some international flights due to delays on wide-body planes. Other carriers, including united airlines and Southwest Airlinessaid they had to scale back some of their growth and hiring plans because of the delay of Boeing planes.
