Boeing delivered fewer planes in March than during some pandemic months. Investors are worried the company may be unable to recover.
Boeing showed a glimpse of the likely disastrous quarterly earnings report coming out on April 24. On Tuesday, the plane manufacturing giant revealed the lowest monthly deliveries since 2021, at the height of the COVID-19 pandemic.
The company, the world’s only large aircraft maker other than Airbus, delivered 29 planes in March. Total deliveries for the three months ending in March were 83, compared with 157 in the previous quarter and 130 in the same quarter last year.
Orders in March amounted to 111, including two cancellations. Those were added to the almost 6,300 backlog orders, most of which running late on schedule.
The delays are angering global airlines, who are seeking alternatives from Airbus. United Airlines CEO Scott Kirby said they’re in the market for Airbus planes. “And if we get a deal that the economics work,” he added, “then we’ll do something.”
But delivery delays may be the last problem Boeing faces right now. 2024 was supposed to be the year Boeing retook its lead on Airbus, but when an Alaska Airlines flight lost its door after take-off in January, it immediately broke that dream.
After that incident, several Boeing planes had severe malfunctions, putting hundreds of passengers in mortal danger. Boeing is currently the worst-performing stock in the S&P 500, losing almost 30% year-to-date.
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What is going on with Boeing?
Impossible recovery?
Boeing was forced to grant Alaska Airlines a $160 million compensation fee after January’s incident. Boeing’s commercial aircraft business lost $1.6 billion in 2023, with an overall loss of $2.2 billion for the entire company.
These financial troubles will likely worsen Boeing’s recovery, whose path is anything but clear.
Last month, CEO Dave Calhoun said he would resign by year’s end. Calhoun follows an unfortunate streak of short-lived Boeing CEOs, whose tenure has been constantly worse than the previous one.
Commenting on the low deliveries, Boeing’s CFO Brian West said they are deliberately slowing down production lines to conform with stricter safety measures. “We are the ones who made the decision to constrain rates on the 737 program below 38 per month until we feel like we’re ready. And we’ll feel the impact of that over the next several months,” West said.
The 737 is Boeing’s most successful aircraft. Its successor the 737 MAX was supposed to breathe new life for the company but was rid of several safety issues.
Last month, a 737 MAX plane started plunging mid-flight with pilots unable to control it. Though they were able to solve the issue after a few seconds, it left several passengers wounded.
Boeing dug itself a deep hole. Whether it manages to climb out remains an open question.
