Boeing (NYSE:BA) managed to narrow its fourth-quarter loss to $30 million and ramped up production of its top-selling aircraft just before a concerning incident occurred, raising fresh safety worries about the aerospace manufacturer. The reported loss was smaller than anticipated by Wall Street, and revenue exceeded expectations.
However, Boeing refrained from providing its own forecast for 2024 results, signaling the uncertainty surrounding the company following an incident involving a 737 Max 9 operated by Alaska Airlines. The aircraft experienced a midflight blowout of a side panel, referred to as a door plug, on January 5, prompting new safety concerns.
CEO David Calhoun acknowledged the turbulent situation, emphasizing a commitment to improving quality post the Alaska Airlines accident. While Boeing traditionally uses this period to share financial and operational objectives, Calhoun noted that the current circumstances are not conducive to such projections.
Boeing’s move to outsource manufacturing processes to suppliers, seeking cost savings, has come under scrutiny. Spirit AeroSystems, the primary supplier for the 737, plays a crucial role in manufacturing fuselages and installing door plugs. However, it remains unclear whether Spirit or Boeing last worked on the problematic plug.
Calhoun acknowledged a potential over-reliance on suppliers, stating that Boeing remains responsible for the entire supply chain. He asserted, “I want everybody — everybody on every airplane — to know that Boeing owns it. We own our supply chain. We own Spirit. We own the results of our work.”
The fourth-quarter results marked an improvement from a $663 million loss a year earlier, with Boeing reporting a loss of 47 cents per share, excluding one-time items, surpassing analysts’ expectations. Revenue rose 10% to $22.02 billion, and Boeing achieved its target of producing 38 737s a month by the end of the last year.
Despite these positive financial indicators, Boeing faces renewed safety concerns after the door plug incident. The FAA grounded all Max 9s in the U.S. for nearly three weeks, affecting over 1,000 flights. Alaska anticipates Boeing to cover around $150 million in losses, while United Airlines has hinted at potential changes to its future 737 model purchases.
The FAA has indicated it won’t allow Boeing to expand Max production until safety concerns are addressed. Additionally, Boeing withdrew a request for an exemption from a safety standard for the Max 7, highlighting ongoing quality control challenges. Analysts suggest that Boeing needs to prioritize quality control efforts, potentially impacting the delivery of new planes in 2024.
Boeing shares have experienced significant fluctuations, rising 5% in morning trading after falling 24% since the Max 9 incident. The company is navigating a challenging period, balancing financial performance with ongoing safety and quality control issues.
Featured Image: Megapixl
Author Stephanie Bédard-Châteauneuf 
