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Boeing grounds 2024 forecast amid plane panel fallout

“Now is not the time,” CEO tells investors.
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Boeing’s troubled 737 Max 9 airplanes may have returned to the skies after collecting dust in the hangar for three weeks, but the company has delayed its 2024 financial outlook while it grapples with the fallout of the Alaska Airlines incident, the company’s chief executive said.

“Now is not the time for that,” CEO David Calhoun told investors during an earnings call on Wednesday.

The Federal Aviation Administration ordered Max 9 planes grounded after a door panel flew off a Max 9 plane operated by Alaska Airlines mid-flight in early January. The crew made an emergency landing in Portland, and nobody on the flight was injured. However, the incident raised questions about the safety of the Max 9 model, according to the New York Times. One former Boeing manager told the Los Angeles Times he “would absolutely not fly a Max airplane.”

Calhoun said he could not comment on the ongoing National Transportation Safety Board investigation as to what may have caused the incident.

“Whatever conclusions are reached, Boeing is accountable for what happened,” he said on the earnings call. “Whatever the specific cause of the accident might turn out to be, an event like this simply must not happen on an airplane that leaves one of our factories. We simply must be better.”

Calhoun walked investors through the steps Boeing is taking to strengthen its quality controls and inspection process. It “issued bulletins to suppliers to strengthen the focus on conformance and reduc[e] the risk of quality escapes,” he said. “We opened our factories to 737 operators for additional direct oversight and we appointed an expert quality adviser to conduct a comprehensive and independent review of our commercial airplane quality management system.”

And last week, Boeing shut down 737 production for one day for some 10,000 employees to focus on safety and quality measures, Calhoun said.

“This was a quality stand-down at a scale we have never done before, and we’re going to keep doing them across our commercial factories.”

Boeing is producing 38 new 737 aircraft per month, a rate that will remain in place while the FAA reviews the company’s processes, Calhoun said.

“I know that these moments that impact delivery schedules can frustrate our customers and our investors. But quality and safety must come above all else, and our customers and our investors know that and are in there with us,” he said.

Q4 performance. Boeing reported fourth-quarter revenue of $22 billion, a 10% year over year increase, and full-year revenue of $77.8 billion, up 17% from 2022. Its Q4 net loss totaled $30 million, compared with $663 million in losses the prior-year quarter. Net losses in 2023 totaled $2.2 billion, compared with $5.1 billion the previous year.

News built for finance pros

CFO Brew helps finance pros navigate their roles with insights into risk management, compliance, and strategy through our newsletter, virtual events, and digital guides.