Boeing loses almost $1bn every month in 2024
3 min readIn 2024, Boeing faced a disastrous financial year, losing nearly a billion dollars a month due to a series of crises. The company reported an $11.8 billion loss for the year, marking its worst performance since 2020, when the aviation industry was hit hard by the COVID-19 pandemic. The third quarter, which ended in December, was particularly brutal, with Boeing losing $3.8 billion as a result of ongoing strikes and other operational challenges.
Boeing’s troubles were compounded by a combination of safety and quality control issues within its commercial aircraft division, as well as problems with several defense programs. The company’s CEO, Kelly Ortberg, acknowledged the severe setbacks and emphasized that fundamental changes were necessary to restore both financial health and public trust in the brand.
One of the most alarming incidents in January 2024 was when a door panel detached from a brand-new 737 Max shortly after takeoff, creating a large hole in the side of the aircraft. Investigators revealed that the panel had not been properly secured, underscoring serious lapses in quality control at Boeing and its key supplier, Spirit Aerosystems. This incident reignited concerns about Boeing’s commitment to safety, especially after the company had already been grappling with the aftermath of two fatal crashes involving the 737 Max 8 model in 2018 and 2019, which resulted in 346 deaths.
This latest safety breach forced Boeing to scale back production and prompted regulators to impose stricter requirements on the company’s manufacturing processes. They also mandated the implementation of a comprehensive safety and quality control plan to ensure that future aircraft met the necessary standards.
In August 2024, Boeing brought in new leadership in the form of Ortberg, a veteran engineer, to guide the company through these turbulent times. However, his efforts were immediately challenged by a major strike that began in September. More than 33,000 Boeing workers, primarily based in the Seattle area, walked off the job, shutting down two of the company’s key factories. The strike halted production of some of Boeing’s most important aircraft, including the 737 Max, 777, and 767 freighter models. The seven-week stoppage, driven by employee dissatisfaction over pay and retirement benefits, cost Boeing billions of dollars in lost production.
The labor dispute was eventually resolved in November 2024, but the damage had already been done. In response to these financial losses, Boeing announced plans to reduce its workforce by 10% and raised over $20 billion through a combination of share sales and loans to safeguard its credit rating. The company also delayed the much-anticipated 777X, a new version of its long-range aircraft. Originally scheduled to enter service in 2025, the 777X will now not carry passengers until 2026, further impacting Boeing’s bottom line.
In terms of aircraft deliveries, Boeing fell far behind its competitor Airbus. Boeing delivered only 348 commercial aircraft in 2024, while Airbus delivered 766, a significant difference that highlights the scale of Boeing’s challenges in the commercial aviation market.
Boeing’s defense sector also faced serious difficulties, although they received less media attention. The defense division lost over $5 billion due to rising costs associated with fixed-price military contracts. These additional financial burdens only deepened the company’s overall financial struggles.
Despite these setbacks, Ortberg remained hopeful. He highlighted the progress the company had made in stabilizing its operations and reaffirmed Boeing’s commitment to strengthening its safety and quality systems. He also emphasized the importance of making the necessary changes to recover the company’s performance and rebuild trust with key stakeholders, including customers, employees, suppliers, investors, and regulators.
While Boeing faces an uphill battle to recover from these setbacks, its focus on improving operations and safety will be crucial in the months ahead. The company’s ability to restore confidence and make lasting changes will determine its future in the highly competitive aerospace industry.
Source: BBC
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