A piece that jumped into the air in mid-flight has marked Boeing's first quarter results. He January Alaska Airlines plane crash has unleashed a crisis in the American aircraft manufacturer, which is under greater scrutiny by the authorities. The quality crisis has slowed aircraft deliveries, hampered income and increased cash consumption to 4,929 million dollars, as reflected the results presented this Wednesday by the company. Revenue fell 8%, to 16,569 million dollars (about 15,500 million euros, at the current exchange rate). Still, the company reduced its net losses from $425 million to $355 million.
This reduction in losses hides the strong cash consumption by the company in the first three months of the year. The operating cash flow went from being negative in the amount of 318 million dollars to being negative in the amount of 3,362 million. The company stopped the delivery and collection of aircraft, so although manufacturing jobs were recorded as income, the truth is that the money does not enter the cash register at the same rate. Free cash flow (cash available to shareholders, repayment of debt, and acquisitions after making investments necessary for operations) was negative $4,929 million.
“Our first quarter results reflect the immediate actions we have taken to slow 737 production to drive quality improvements,” said Dave Calhoun, president and CEO of Boeing, via a statement filed with the Securities and Exchange Commission (the SEC). “We will take the time necessary to Strengthen our quality and safety management systems and this work will position us for a more solid and stable future,” he added.
Calhoun, 66, announced last month his decision to resign as CEO at the end of 2024. He will continue to lead Boeing this year to complete the work being carried out to stabilize the company
Crash in commercial aviation
The commercial aircraft division's revenue plummeted 31% in the first quarter, to $4,653 million. The operating margin was negative 24.6%. Aircraft deliveries fell by 36%, from 130 to 83 devices. All of that primarily reflects lower 737 deliveries and customer considerations about the grounding of the 737-9.
During the quarter, the 737 program slowed production below 38 per month to try to Incorporate improvements to your quality management system. Additionally, the division is implementing a global action plan to address the comments from the aeronautical authority audit (the FAA) on the production of the 737.
Boeing received 125 net orders in the quarter, including 85 737-10 aircraft for American Airlines and 28 777X aircraft for customers such as Ethiopian Airlines. The company delivered 83 aircraft during the quarter and the order book included more than 5,600 aircraft valued at $448 billion as of March 31.
The collapse of the commercial aircraft division was partially offset by the good evolution of the income of the division dedicated to defense, space and security (they grew by 6%, to 6.95 billion dollars) and of the services area, which includes maintenance (increased on 7, up to 5,045 million).
Boeing is under close surveillance since the accident at the beginning of the year in which an Alaska Airlines plane lost a panel in mid-flight that covered a hole intended for an emergency door in other configurations of the model, a 737 Max. Furthermore, a harsh report commissioned by US regulators and posted at the end of last month It called into question Boeing's “safety culture” in what is a new blow for the American commercial aircraft manufacturer.
The company closed last year with losses of 2,222 million dollars (about 2,050 million euros). Although these are red numbers, their amount is less than half that the 4,935 million dollars of losses from the previous year. The company already suffered losses of 636 million in 2019, which worsened to the record of 11,873 million dollars in 2020. It then lost 4,202 million in 2021. The accumulated red numbers of the last five years add up to about 23,800 million dollars.
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