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Boeing declines to give a financial outlook as it focuses on quality and safety
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Boeing released its 2023 earnings Wednesday, but the company's CEO spent most of a call with investors talking about safety and quality.
Boeing is facing big questions about quality control after a door plug panel blew off one of its 737 Max 9 jets in midair earlier this month.
"We are not issuing financial outlook for 2024 today. Now is not the time for that," chief executive Dave Calhoun said during an earnings call.
Instead, Calhoun focused much of the call seeking to reassure analysts — and the flying public — that the plane maker is taking the incident seriously.
"We will simply focus on every next airplane, and ensuring we meet all the standards that we have, all the standards that our regulator has and that our customers demand," he said.
Calhoun did not offer any information about the cause of the incident on January 5th, which is still under investigation by the National Transportation Safety Board. No one was seriously injured, but the incident touched off another crisis for Boeing. The troubled plane maker was still working to rebuild public trust after 346 people died in two 737 Max 8 jets that crashed in 2018 and 2019.
Boeing said Wednesday it lost $30 million in the fourth quarter of 2023. That's a better performance than the final quarter of 2022, when the company lost more than $600 million. Overall, Boeing lost $2.2 billion last year — its best result in 5 years.
But any improvement in the company's financials has been overshadowed by the latest safety incident.
The Federal Aviation Administration is allowing Boeing 737 Max 9 planes to fly again after an inspection and maintenance. Calhoun said airlines have now returned 129 Max 9 planes to service, out of a total of 171 that were grounded by the FAA.
Earlier this week, Boeing formally withdrew its request for an exemption from federal safety rules in order to speed up certification of its new Boeing Max 7 jet to start flying. The company had been hoping to begin delivering those smaller planes to airlines this year, despite a design flaw with the Max's engine de-icing system that could be potentially catastrophic.
Boeing wanted to use the same workaround that's already in use on its Max 8 and Max 9 jets. Now the company says it will focus on a permanent engineering fix instead.
Calhoun told analysts on Wednesday that process is expected to take about nine months, likely pushing certification of the Max 7 back into 2025.
The FAA has also taken the unusual step of ordering production caps at Boeing's factories. Calhoun said the company will continue producing 737s at the rate of 38 per month until the FAA agrees to lift that limit. And Calhoun told analysts that slowing down production at the behest of regulators would help the company fix problems in its factory and supply chain.
"I'm sort of glad they called out a pause. That's an excuse to take our time, and do it right," Calhoun said. "This is what we do, and how we get better."
But some longtime observers are skeptical that Boeing management is ready to confront the true scale of the problem.
"I'm sure they're hoping for a quick fix," said Peter Lemme, a former Boeing engineer who's now an aviation consultant. "But this is like a cancer in the system. And how far has it infiltrated, and what are you gonna do to eradicate it? I think it's going to take years for Boeing to really get back to where they should be on quality and manufacturing."
The NTSB is expected to release preliminary findings from its investigations of the Alaska Airlines incident in the coming days.
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