Boeing CEO Outlines Path to Recovery After Nearly $4 Billion Quarterly Loss
Skift Take
Key Points
- Boeing reported a nearly $4 billion loss for the fourth quarter of 2024, largely due to a machinist strike affecting production.
- The FAA acknowledged improvements in Boeing's safety management, allowing potential increases in 737 Max production.
- Delivery delays have significantly impacted airlines, leading to route suspensions and operational changes for companies like Southwest and Ryanair.
Summary
Boeing faced a challenging fourth quarter in 2024, reporting a nearly $4 billion loss influenced by a costly machinist strike that disrupted production. Despite these setbacks, the company is making progress in its recovery efforts, as noted by the FAA, which has seen significant improvements in Boeing's safety management. However, delivery delays continue to affect airlines globally, prompting operational adjustments by carriers such as Southwest and Ryanair.
Boeing CEO Kelly Ortberg said the company is making progress on its recovery plan after reporting a nearly $4 billion loss for the last three months of 2024.
During a call with analysts on Tuesday, Ortberg said the plane maker completed a safety management meeting with the Federal Aviation Administration, adding that the federal agency said it had seen “significant improvements.”
Ortberg said that Boeing and the FAA have also agreed on a path for increasing the production of the 737 Max beyond the cap of 38 per month. Last year, the FAA placed a production cap on the 737 Max line following the Alaska Airlines blowout.
Boeing lost $3.86 billion during the fourth quarter and reported revenues of $15.2 billion, down 31% from the year before. The plane maker had a total loss of $11.83 billion for 2024, its largest since 2020.
The weeks-long machinist strike was part of the reason the plane maker reported a disappointing quarter. The strike, which cost the company roughly $1 billion per month, paralyzed Boeing’s production, further prolonged delivery delays and led to layoffs.
Persistent Delays Continue to Affect Airline Industry
Boeing’s delivery delays have affected the airline industry worldwide. Last year, Southwest Airlines exited four airports and started operating red-eye flights in response to the delivery delays.
United Chief Commercial Officer Andrew Nocella said during the Skift Global Forum in September that the carrier had already implemented an insurance plan for the year due to delivery delays.
American Airlines suspended three European routes this summer and delayed the launch of its new Flagship Suite business class due to 787 delivery delays, according to a report from The Points Guy.
European budget airline Ryanair cut its passenger forecast again as a result of Boeing delays, according to Reuters.
“While it was a challenging year, we are seeing encouraging signs of progress as we work together to turn around our company,” Ortberg said in a memo to staff on Tuesday.
The Boeing CEO added that the company is working to turn around its culture and stabilize other parts of the business. In particular, Boeing is looking to restore 787 production to five aircraft a month, after facing supply chain shortages. Ortberg also said in the memo that Boeing has “fewer layers in our organization to make faster decisions.”
“I’ve heard from many of you that we need to be less bureaucratic and more agile – and that we are truly making progress,” he said.
Airlines Sector Stock Index Performance Year-to-Date
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Photo Credit: A Boeing 737 Max. Anna Zvereva/Wikimedia Commons Wikimedia Commons / Anna Zvereva
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