Boeing CEO promises company is turning around…again

By the Leeham News Team

April 24, 2024, © Leeham News: Boeing burned about $3.9B in free cash and posted a loss of $1.13 per share during the first quarter, the company reported on Wednesday. It also reported its first quarter-over-quarter revenue decline since 2022.

Even so, the bleeding was substantially less than expected by Wall Street, which had a consensus forecast of -$1.63/share (and a range of -33 cents/share to -$3.16/share). Boeing Commercial Airplanes’ financial performance suffered from the downturn in 737 MAX production since the Jan. 5 accident involving Alaska Airlines Flight 1282, when an emergency exit door plug blew out as the plane climbed out of Portland.

The company’s quarterly finances were bolstered by Boeing Global Services and Boeing Defense.

Boeing CEO David Calhoun continued to assert that company executives are proactively cleaning up an inconsistent safety culture and addressing production woes from their corporate offices on the Potomac. The company’s planned acquisition of Spirit AeroSystems is taking longer than expected, and it could be wrapped up by mid-year, he told investment analysts during a conference call on Wednesday.

Fuselages for the 737 MAX program from Wichita have fewer and fewer defects, and the program’s production rate will increase in the second half of the year, Calhoun and Boeing CFO Brian West said during the call.

Whistling through

Boeing executives did not say how many 737 MAX airplanes the company is turning out right now. After the Jan. 5 accident, the Federal Aviation Administration capped its production rate at 38 per month, but its actual rate is well below that. In mid-April, JP Morgan aerospace analyst Seth Seifman estimated that the company is producing about 15 new 737s/month. The company delivered 67 737s during the first quarter.

“All of the 737 disruption that goes on today is, in my view, self-inflicted,” Calhoun said. Boeing gone further than the FAA has required to slow down production to address quality problems.

Boeing is halfway through the 90 days the FAA gave it on Feb. 28, to produce a plan to clean up what the agency called “systemic quality-control issues.”

The result won’t be a magic wand that will solve everything, but rather, a set of metrics to measure quality improvement, he said.

“The most important thing that occurs…is going to be the pace at which clean fuselages come out of Wichita,” where Spirit assembles 737 fuselages, Calhoun said.

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Boeing and Spirit have put in place new inspection standards to eliminate traveled work and defects, and new fuselages are coming out with fewer and fewer problems, he said. “When we get a clean one, it whistles through the factory.”

The companies should finish reworking fuselages assembled before the new standards went into place in the next 60 days, according to Calhoun.

By the end of the second quarter, Boeing expects to know how fast Spirit can turn out clean fuselages.

Spirit merger delayed and other items

Boeing’s acquisition of Spirit is taking longer than expected, due to negotiations to spin off the suppliers’ work for European airplane maker Airbus. On Tuesday, Boeing announced a new memorandum of understanding with the supplier to advance $425 million in payments, which will come back to Boeing in the third quarter.

Boeing Defense surprised Wall Street by posting a a small profit of $151M on $6,950M revenue. The positive bottom line for the division came despite $222M in losses on fixed-cost development programs. The quarterly performance compared to a loss of $212M from $6,539M revenue in the first quarter of 2023. Company leaders credited the turnaround to higher volume and improved performance.

The company’s Global Services division further buoyed Boeing’s ledger sheet with just over $5B in revenue and $916M in profit. That is a slight increase over the $847M profit BGS posted a year ago. During the first quarter, the U.S. Navy exercised options on a P-8 sustainment modification contract, and BGS opened a maintenance facility in Jacksonville, Florida, supporting military customers.

Discussing his planned retirement by the end of the year, Calhoun did not provide any specifics on who likely will succeed him. He did say that he has an internal candidate “that I think the world of.”

148 Comments on “Boeing CEO promises company is turning around…again

  1. “..addressing production woes from their corporate offices on the Potomac” was very good; very dry.

    It seems not much has changed or is changing at that company.

    • It may see the “China is trash production” thing.

      You get value to the tune of what the manufacturer got paid.
      ( and not what the local shop called up.)

    • Because Boeing management could have cared less and only when the guy says, the Emperor has not cloths (aka a Exit Blank blowout) does the wrath of the press and congress turn on the Billion Watt spotlight.

      Then the Cockroaches start to scramble.

      And Calhoun hits the Auto Spin button over and over and over again.

      I had a good laugh on an Av Week Editorial and while it was generally spot on,
      it gave no credence to those of us who watch this and saw before the 787 the wheels were coming off.

      The 787 raised hopes as it was an all new aircraft and Av Week nailed it when they said it was a failed build system.

      Boeing did not want to do an aircraft as the uppers wanted to continue to liquidate the company.

      I am sure Mullaly knew this and he took what he could get for the commitment and knowing it would be bad but with pretty solid tech, work in the end.

      When the first empty 787 was rolled out and people were quitting in droves you began to see behind the smoke and mirrors. That is a problem, you can suspect all you want, the Corporation plays the usable deniability card and it gets covered up, until it blow out and does not.

      What the sleaze bags like Calhoun do not get is you cannot BS a tech aspect into compliance. Its going to fail if its badly done.

      And you get down to it, Calhoun could have cared less about bad fuselages or anything else as long as he got his ill gotten lucre.

      • Former Boeing QE-QAI here, Boeing also told those of us who gave a shit and good at what we do. To shut up! and go away. Then they systematically got rid of us

      • “And Calhoun hits the Auto Spin button over and over and over again.”
        This, and the headline, left me thinking of an executive who has “turned the company around” so much and so often he’s dizzy and doesn’t know which way is up.

        • Or did he discover Annalena Baerbock and copied her signature 360 degree turn around?

        • Well spin cycle for sure.

          But the truth is he cared less about turning it around and all about lucre

          All the ref aside, if people had been calling the cascade of money greedy at the sake of safety all this time, we would not have gotten here.

          Lies repeated and then not challenged have conseque3cnes.

          Years after I had moved on my brother had a conversation with a Branch Manager. He comment was, he never lied to us. He told us what the problem was, what was being done to correct it and how long he thought it would take.

  2. This CEO is shameless!
    Rather than honestly resigning he is staying, fatly paid and meddling to put someone in place who will be able to maintain his inflated retirement benefits.

    Corporate greed at the highest level.

  3. Cash took a big hit, when everything is summed up;

    $11.1 billion spent.

    How does one get there? From their press release:

    ‘Cash and investments in marketable securities totaled $7.5 billion, compared to $16.0 billion at the beginning of the quarter reflecting debt repayment and free cash flow usage in the quarter (Table 3). ‘

    So the cash balance at the end of the quarter was $8.5 billion less, than where it was at the beginning. They also had this:

    Advances and progress billings 58,972 56,328

    Customer gave them an extra $2.6 billion in unearned revenue, over the quarter. It’s a liability, which must be re-paid (in product).

    Boeing now has this left:

    Cash & cash equivalents $6,914
    Short-term and other investments 615

    Down from:

    Cash and cash equivalents $12,691
    Short-term and other investments 3,274

    But on the bright side, they do say this:

    ‘The company has access to credit facilities of $10.0 billion, which remain undrawn.’

    Another credit card to run to the store with…


    It’ll be interesting to see what the details of this, from their statement of cash flows

    Inventories (3,778)

        • I stepped on a nail to save a couple of guys who had a load of pallets about to crush them.

          Funny what goes through your mind.

          It was either to keep pushing that nail into my foot while pushing on the pallet load or we all were going to get crushed.

          Yes I screamed from the pain as I did it.

          ps: I know how much Frank P enjoys the stories.

        • Just like GE did when Warren Buffet did loan them on stiff terms, but that saved the day. GE has approx. $17bn in cash now and could pay Boeing for a 737MAX successor with that cash. The outlook for GE Aerospace for 2024/2025 looks extremely good as 100’s of A320neos with PW1100G are grounded boosting spare sales on CFM56 engines and LEAP sales until P&W catch up and airlines forget about the groundings.

          • That one’s a Permanent Pollyanna, for obscure reasons.
            “carbon fiber and robots will save the day..”
            yeah, yeah; sure, sure Bro.

            Munny can be created in an instant via keystroke these days;
            real, durable, useful and transferable resources cannot.
            Soon enough we’ll all be farming [again]. Many of us will be the soil.

  4. “Boeing’s acquisition of Spirit is taking longer than expected…”

    Still curious as to where Boeing is going to find funds to buy (a portion of) Spirit.
    Mr. West told us recently that Boeing expects to pay “using cash and debt”, but that strikes me as being totally unrealistic in view of the financial cesspit in which Boeing currently finds itself.

    • The vast majority of Boeing’s debt is in the form of bonds, most of it raised in 2019-2021… and some of it having a maturity term of 40 years. As long as there are people buying those bonds, Boeing will be able to raise money.

      • More bond issuance risks triggering a credit rating downgrade…and will incur a penal interest rate.
        Good luck with that.

        • I am not expert in that area, they say Boeing can do it and I believe they know what they are talking about.

          The delay has to do with Boeing wanting to divest the non Boeing related Spirits stuff (aka mostly Airbus but Spirit is involved with the B-21 and some other odds and ends)

          Spin off what you can before you guy it and you get it at as low a cost as possible.

          The Funny part is Calhoun flubs everything he touches so buying Spirit does nothing other than add more to what he messes up.

          • At the expense of BA’s investment grade credit rating?? 🙄

            “Moody’s Ratings downgraded Boeing’s credit rating to Baa3 from Baa2, according to a statement Wednesday. The rating outlook is negative. The downgrade, applied to Boeing’s senior unsecured debt, reflects “inadequate performance of Boeing’s Commercial Airplanes segment,” according to the statement.

          • @Pedro

            Further to what you posted:
            “Boeing’s Credit Rating on Cusp of Junk After Moody’s Downgrade”

            “Moody’s sees headwinds related to the segment will persist at least through 2026 and that the company’s annual free cash flow will fall short of the $4.3 billion of debt coming due in 2025 and also the $8 billion coming due in 2026. Moody’s anticipates that Boeing will issue new debt to fund these shortfalls. ”


          • How the hell BA is going to buy Spirit before it restores 737 MAX production rate at or above 38/mth?

          • Didn’t Dave insist this morning to reach his target of $10b FCF in 2025-26-ish? Moody’s gave him a vote of non-confidence?

      • Yeah, but a majority of its debt matures before 2030!
        The $25 billion bond Boeing sold in May 2020 is divided into: US$3bn three-year (i.e. 2023), US$3.5bn (2025), US$2bn seven-year, US$4.5bn 10-year, US$3bn 20-year, US$5.5bn 30-year and US$3.5bn 40-year.

        Boeing has continued to raise fund thru sale of bonds and current interest is much higher than 2020!

  5. Lots of money being thrown at external data analytics companies,I’m told. This would seem to be a very good idea to try and get a hold on the problems,although it does beg the question of exactly what they have been doing up to now

  6. “Even so, the bleeding was substantially less than expected by Wall Street, which had a consensus forecast of -$1.63/share (and a range of -33 cents/share to -$3.16/share)”

    Program accounting might have helped smoothing those numbers, dependently how much costs are recognized as “abnormal production costs”, and thus recognized as there are incurred, or spread further down among future production units.

  7. “The most important thing that occurs…is going to be the pace at which clean fuselages come out of Wichita” David Cahoun, CEO of Boeing, which currently has serious safety and production issues.

    “We cannot do quantity at the detriment of quality. We deliver on quality and safety. ” Guillaume Faury, CEO of Airbus, which currently doesn’t have serious safety and production issues. And who also goes onto to explain their ramp up is driven by the speed at which they can bring new hires fully up to standard on the complex business of airplane manufacture.

  8. Clearly the BOD and the C-Suite believe things will just blow over with time……

    • Well that is or was part of the standard play book.

      It did not work as this story has legs longer than a Giraffe.

      Now they are into sacrifice uppers.

      I don’t see Pope as any answer so the anointed successor is not it either. She has her adherents but I can’t believe Mush Mouth would put her into that position after cleaning out the people he did not like or were beholden to him unless he felt she was following his pillage the company MO.

  9. Tough words from Uncle Sam:

    “ARLINGTON, Virginia (Reuters) – U.S. Transportation Secretary Pete Buttigieg said on Wednesday that Boeing (NYSE:BA) must meet a government mandate to address systemic quality-control issues within 90 days before it will be able to boost 737 MAX production.

    “Buttigieg noted that Boeing is about halfway through that 90-day clock set by the Federal Aviation Administration (FAA).

    “”We’re not to going let them (increase production) until they have satisfied to the FAA that they can do it safely,” he said at an event at Reagan National Airport outside Washington.”

    • It’s just another PR distraction: Boeing is producing nowhere near the 38 p/m MAX ceiling, anyway. Some say they’re around, uh, fifteen.

      seamless PR-fusion, though.. your basic “Public-Private Partnership” (blech, I detest that deceptive, misleading term).

      • Strange that the FAA did not allow Boeing to set up a fresh 737MAX line in Everett with the old widebody staff. That could be a high quality and well managed FAL that then can offload Renton as they or Everett fix their final assembly lines.

  10. @Vincent
    I noticed that too. There was a statement about increasing production but not to what rate. They could go to 38/mo and that would be an increase. That statement sidesteps when Boeing is expecting the cap to be removed

    • The cap will be removed exactly when Boeing is capable of achieving that rate.
      FAA designed it this way

  11. $222M in KC-46A and T7 charges:

    “WASHINGTON — Boeing’s defense business booked $222 million in losses across its portfolio of fixed price development programs during the first three months of 2024, the company said today.

    “The KC-46 tanker program logged a $128 million charge, while the T-7 trainer program took a $94 million hit, Chief Financial Officer Brian West said during a first quarter earnings call.”

    • Remember the excitement here when fuselage of the T-7 first joined without much issues?

  12. Per Abalone’s BB link:

    1) Does this mean Boing’s vaunted FCF is not proving
    to be as claimed? 😉

    2) Will Boing continue to be able to affordably and sustainably borrow (cf Spirit, current debt, further hemorrhage)?

    3) How long before the Uncle Sugar bailout of Boing- which will further enrich the same scoundrels who *caused* all this?

    • Add to that:
      4) Will the Uncle Sugar bailout come before or after Boing enters Chapter 11?

  13. I am getting reminded of Enron! Such a brilliant smoke and mirrors company until it collapsed. We used to feel very safe flying Boeing..

    • Maybe what appears to be going on is not what’s really going on- and not just at Boing.

    • -> The US regulator has asked Boeing to develop a better set of monitors and measures to assess the performance of its factories and supply chain so that Boeing won’t over-extend production rates. “And if it ever gets out of control, the signals are clear both to the FAA and to us,” [Calhoun] said.

      -> Some analysts remain skeptical that Boeing will be able to meet the tight timeline that executives have sketched out for turning around its production — and finances. The company still hasn’t posted an annual profit, four years after the Covid pandemic added to the squeeze from a global grounding of its 737 Max following two fatal crashes.

      “If the pattern of recent years continues, and cashflow doesn’t go according to plan, things could get a little uncomfortable,” said Nick Cunningham, an analyst at Agency Partners.

      • @Pedro

        Problems created over years are not fixed in months or weeks

  14. Wow! Wow!!

    “BREAKING: The Air Force has selected Anduril Industries and General Atomics to move to the next phase of the Collaborative Combat Aircraft (loyal wingman) program that involves drones flying alongside crewed fighter planes.

    “Defense primes Boeing, Lockheed Martin and Northrop Grumman are not moving forward in the next phase.

    • @Pedro

      There are two bigger contracts to be had…NGAD and the F18 replacement. Boeing will get one of them at least and maybe another tranche of tankers. It is not in the interest of US government to lose one of their prime contractors.

      I hazard that was half the reason why Northrop got the B21…same reason.

      • Can’t say you are wrong but it does not always break out as LM had the F-22 at the time and Boeing lost the contest for the next replacement.

        LM sure pulled some wool over eyes but has a franchise for the foreseeable future.

        Boeing will go at least 300 tankers. USAF has nothing to replace it and the NGT is going to be delayed for long long time.

        NG is now in a bind as the illustrious USAF leadership is trying to truncate production at the now standard 100. Have to look it up, but it was 200 or more to start with.

        They have decided the next pie in the sky is it though they have not a clue what it is, but like Calhoun, not a clue about a lot of things other than shiny toys in the future vs a degrading fleet now.

        The USAF is all agog at a so called AI doing ACM, when in fact no one has done a gun kill fighter to fighter since Vietnam. Maybe some drones shot down that way but you spend billions on billions for missiles and missile system (F-35) and you are going to shoot something down with a gun? One that has all of 2 seconds of ammo? Right.

  15. 😂
    ‘The headline of Robt Stallard’s Vertical Research note on @boeing says it all: “1Q24 – Seven hundred and thirty seven problems”.

    ‘He continues: Fantasy Land – If there has been one thing that has been consistent about Boeing over our many years of covering the company it has been its hopelessly optimistic timetables for improvement. We think this will again be the case with what has been set out today.”

    ‘And: “Mgmt [is] seemingly nonchalant about regulatory, political, legal, contractual, customer, competitive, supply chain and internal employee pressures it faces. Hopefully a new mgmt team will rebase expectations realistically, with more humble view of challenges Boeing faces.

  16. A thread by Ostrower:

    “Boeing CFO Brian West said the company spent $443 million of customer considerations (compensations/settlement) in 1Q as a result of the 737 Max 9 grounding in January.

    “Boeing formally slows 787 production ramp up, targeting a pace of 5 per month by year end. 10 per month is now aimed at 2026. (Need to double check my notes, but they definitely told journalists in SC last week they were already at 5 per month)

    “West says “price, financing” and divestment of certain parts of Spirit (read: Airbus plants in NC and NI) is the pacing item for its acquisition of its most important supplier.

    “Boeing CEO David Calhoun finally confirms what’s been known for more than a year at Boeing — and thus was true before AS1282: The company can’t reach 50 per month on the 737 rate unless it acquires Spirit AeroSystems.

    “Calhoun doing a two-step on the 90-day plan demanded by the FAA for its 737 factory. He said it was Boeing’s decision to hold fuselages at Spirit for traveled work and slow the line but in the same breath says of the FAA: “They want a control plan.”

    “Calhoun said seats* (buyer furnished) and formerly Russian-made heat exchangers* are pacing item for 787 ramp up.

    “Calhoun, true to his word that he wants to be part of the Boeing CEO selection process said of the board: “They know I have an internal candidate I think the world of.”

    * How come these become 787 production issues in late 2023, not before?? Didn’t Boeing give plenty “advance” notices of raising the 787 production thru its frequent “leaks” to media?

    • “They know I have an internal candidate I think the world of.”


      • That be a fair bet. If it is a handpicked candidate of Calhoun’s, I would also guess the shareholders and workers will have more of the same.

        • This. Why on earth would they choose their failed CEO’s favored

          • Because that is how the system tries to work.

            All part of the playbook.

            Or as my brothers teacher said when he brought in a badly done project, well its not wasted, its a good example of how not to do it!

    • Airbus appears to be in the catbird’s seat yet again. That last paragraph is a hoot- poor Boing whistling in the dark.

      “Beggars can’t be choosers, sweetie!”


      • @Vincent

        I seem to remember Airbus buying an entire aircraft line for $1.

        Not sure what value there is for Airbus. The assets for sale may have some underlying warts.

        • I think we are in agreement. AB, it seems to me, can just sit back
          and watch the show. I’m sure they have solid contracts for their Spirit
          stuff, and (oddly!) they don’t seem to have the QC issues with that
          supplier that continually plague Boing.

          It’s a funny old world.

          • @Frank
            thank you for the correction…AIB that value later on to 75% and Quebec owns the rest (at least as of 2022).

            Also will say AIB has not made any money yet on this purchase. My original point was that just because something is free does not mean it has value.

          • Airbus worst nightmare has to be Boeing has a management in some of its key supplies on two projects (one of which is not making money as is noted being free then means you have to spend big to fix what caused it to be free in the first place)

            Boeing buying Spirit and makes that whole thing worse as they can’t manage what they have.

            I always said that as much as I love the C series, getting it to work as a viable production money returning operation has its downsides.

            By the time Airbus is done they will spend as much on that as a new aircraft.

            And it is not a common control system with their existing.

    • Funny plan: Boeing moving forward.

      Well, they can move forward until they have to apply for approval from competition authorities.

      It is hard to imagine that a competition authority that takes its task seriously, would allow Boeing to control the biggest components part manufacturer. Such a deal would only be approved under conditions, such as that Boeing sells the divisions that build parts for Lockheed, Airbus.

      And as there is probably exactly one company in the world that is seriously interested in buying that crap, namely Airbus, Boeing will be back to square 1 in negotiations.

      I guess you can well imagine on who’s side the momentum is in these negotiations.

      • There is no reason the so called competition authorities would turn this down.

        It was part of Boeing and the vast majority of it is still supply to Boeing. Its failing and its also in no ones interest to have it fail. Granted it will be worse under Boeing unless or until Boeing gets its act together but that is a Boeing problem.

        If Airbus has concerns they have a solution, they just don’t want to spend the money as it interferes with their profit plans. Oh well, its not a US function to worry about Airbus.

        There are far more than one company that supplies stuff to rivals and it works.

        You either make money doing so (Airbus run scared) or you sell off those parts that don’t fit.

        Airbus does not fit so it goes.

        The other stuff they can offer to other entities if they don’t want to deal with them.

  17. “Boeing Prosecutors Aim to Decide Criminal Charge by Early June”

    “(Bloomberg) — The US Justice Department could decide by the first week of June whether to tear up its controversial deferred-prosecution agreement with Boeing Co., according to lawyers for the families of people killed in two crashes of 737 Max jets.

    “Prosecutors met with the families Wednesday in Washington to share information about the timing of their investigation and listen to concerns. The relatives have criticized the department’s 2021 deal that would allow Boeing to escape criminal charges over crashes in 2018 and 2019 that killed 346 people, if the company met certain conditions, amended its disclosure practices and paid a $243 million fine.

    “But Boeing’s most recent mishap — a midair blowout of a door plug on the fuselage of an Alaska Airlines plane in January — sparked a criminal investigation of the company’s practices and raised the possibility of ditching the DPA, which was set to expire just days after the accident. The department has until July to nix the agreement. Prosecutors aim to decide by early June to give families and Boeing enough notice of what they’re planning. A judge would still have to approve any changes to the deal. ”

    • The likelihood of that sweetheart Boing DPA being revoked?

      Ha ha ha ha ha ha ha ha ha ha show me the part that’s not theatre..

  18. Some BCA Program Highlights:


    ‘As of March 31, 2024, we had approximately 110 737-8 aircraft in inventory that were produced prior to 2023, including approximately 70 aircraft for customers in China. We expect to deliver most of the aircraft in inventory by the end of 2024.’

    “As of March 31, 2024, we had approximately 35 737-7 and 737-10 aircraft in inventory”

    ‘As of March 31, 2024, we had approximately 40 (787) aircraft in inventory that require rework which we expect to complete by the end of 2024.’

    IIRC BCA had 140 Max’s & 50 Dreamliners in Inventory at the end of 2023, so 30 & 10 got delivered from the pile.


    787 Costs

    ‘The inspections and rework costs on inventoried aircraft are accounted for as abnormal production costs, and we expensed $80 million in the three months ended March 31, 2024.’


    ‘We are planning to incorporate engineering solutions to the de-icing systems on the 737-7 and 737-10 prior to certification, which will delay certification and first deliveries. We are following the lead of the FAA as we work through the certification process of the 737-7 and 737-10 models. During the first quarter of 2024, the 737-10 program completed the first phase of FAA certification flight testing.

    We expect the first delivery of the 777-9 to occur in 2025 and the 777-8 freighter to occur in 2027. First delivery of the 777-8 passenger aircraft is not expected to occur before 2030.’


    • “…including approximately 70 aircraft for customers in China. We expect to deliver most of the aircraft in inventory by the end of 2024.’”

      So, all of a sudden, China is going to be taking delivery of dozens of 737s this year? Really?
      It certainly is “The Wonderful World of Disney” in that boardroom, isn’t it?


      “We expect the first delivery of the 777-9 to occur in 2025”

      Well, if they’re that sure, then they should have no problem telling us when that elusive TIA is coming…no?

      • I’m sure BA is going to lean heavily on the word ‘most’ which could mean 35+1.

      • @Abalone

        Its not entirely clear “who” will take delivery. These aircraft conceivably may have a new home.

        • That could be a very costly endeavour for BA. Apparently the re-work is quite extensive and might be extremely difficult. Besides, some of them are approaching 5 years old and have just been sitting there.

          • Yes, indeed:
            Airlines ordered new planes…so they’re not going to be particularly interested in 5-year-old frames that come with “free” corrosion, coagulated fluids, cracked seals and rodent nests. Even if some third-tier airline were interested in a super-duper bargain on such frames, who’d be willing to insure them?

    • and what about Deffered 787 production costs?
      They are still way above $12bn
      Big depreciation to come sooner or later…
      Golden hello at the end of M.Calhoun reign, new CEO usually clean augian stables in their first quarter…

      • The Deferred Production Balances for all 3 programs, along with the Customer Compensation, sit at just over $32 billion.

  19. One of our favorite subjects – List Price Discounting

    Had a little look-see about how much BA is discounting it’s aircraft for the first quarter. The delivery mix was:

    67 Max’s
    3 767’s
    13 787’s

    I did a quick calculation using the lowest price model, to give BA every advantage:

    67 Max’s @ $121.6 million = $8.147 billion
    3 – 767 @ $220 million = $.661 billion
    13 – 787 @ $248.3 million = $3.228 billion

    Total Revenue at full list price: $13,438 billion

    Actual Revenue: $4.653 billion

    ~65% discount across all deliveries for Q1 – 2024, for all models.

    • Thanks for doing the caculation, but it wasn’t strictly necessary — for a long time now, there’s been substantial and varied evidence of over-the-top discounting at Boeing.
      The well-publicized 69% discount that Ryanair apparently got on one of its orders, chimes well with your calculations.

    • Interesting, but parts of those discounts might be due to compensation to airlines due to delayed deliveries. Another factor is the listed prices of those aircraft were lower when they were originally ordered several years ago, and dependently of the escalation factor in the contract, this can made a non-negligible difference on what airlines paid when they received their aircraft. And inflation rate was much lower when those aircraft were originally ordered.

      • @Jacques

        Boeing has an account set up in Inventory, for discounts:

        ‘Commercial aircraft programs inventory included amounts credited in cash or other consideration (early issue sales consideration) to airline customers totaling $4,558 and $4,126 at March 31, 2024 and December 31, 2023’

        But to your point, they do also offer, AFAIK discounted pricing on future deliveries of aircraft when they stick their crank in the fan. There’s also talk of maintenance discounts thrown in over at BGS.

        But this discussion has been going on for some time now, with discounts (for annual deliveries in past years) ranging within a few points of the 60-65% mark.

        Whatever the reason, this isn’t a one off and like a famous football coach once said; “You are, what your record says you are”


        As far as escalation factors/inflation adjustment – if the BA staff either 1) Didn’t think of these things or 2) Traded it off so that orders would get secured – that’s on them.

        One might just as easily say that Boeing had to give huge discounts to airlines, with very generous and lenient terms, in order to secure orders.

        It’s been 5 years and one quarter now – how much longer will the heavy discounting go on? Secondly, given that it’s a two horse race and Airbus has essentially maxed out production, shouldn’t Boeing be able to secure better pricing as the only game left in town?

        • What I mean is inflation is much higher now, and the escalation rate negotiated back in time did not take into consideration. So there is probably a double impact due to delayed delivery, compensation to airlines and compounding effects due to inflation.

          I am pretty sure that Boeing is deeply discounting their aircraft, but not as much as 60-65% on average…maybe 50-55%.

          • And how do you reach that figure? This discussion has been going on for awhile and historical analysis from the financials has shown that the discounting is up over 60%.

            If you are saying that Boeing, in the original contract, does not discount that heavy – I’m afraid it does. And certainly to some customers. There was clear evidence that SouthWest airlines is getting ridiculously low rates (mid 30’s) for a Max 8.

            (Southwest, early during the pandemic, was facing a cash crunch and needed capital. In their 2020 financials, they reported a sale/leaseback arrangement with a lessor. They sold 10 Max’s for $410 million. They then declared a $70 million gain on the asset sale. Do the math)

            I’m sure Ryanair get’s similar pricing. The there is that huge 787 order to United to replace their 767’s.

            If you say that this is a discount blip that will go away…could be. But it’s been a heck of a long blip.

  20. “Airbus outperforms Boeing in APAC market”

    “With a strong order book from airline operators and leasing companies based in India, China, and Singapore during 2020–2024, Airbus has fortified its position in the Asia-Pacific (APAC) commercial aircraft market amid continued Boeing’s woes. As it is being scrutinised for multiple mishaps involving its 737 Max aircraft line, Boeing continues to lose ground in the APAC region to its biggest competitor, says GlobalData, a data and analytics company.

    “GlobalData’s dashboard Commercial Aircraft Orders and Deliveries reveals that in the APAC region, Airbus received a total of 1,489 aircraft orders between 2020 and 2024 (till March 2024), compared to only 561 aircraft orders for Boeing.”

    “GlobalData’s dashboard also uncovers that Airbus has outpaced Boeing in terms of deliveries. Between 2020 and 2024, Airbus delivered 2,717 aircraft, while Boeing managed to deliver only 1,594 aircraft. Boeing, which had plans to increase the production capacity of its top-selling aircraft model, the 737 Max, is currently facing severe challenges on multiple fronts as the US Federal Aviation Administration (FAA) froze its expansion plans in January 2024 due to an ongoing audit of its existing production lines. This is further expected to affect Boeing’s aircraft delivery rate in the coming years.”

  21. Since 2019 – The BCA Scorecard

    Year BCA Revenues Earnings Deliveries

    2024 4653 -1143 83
    2023 33901 -1635 528
    2022 25867 -2370 480
    2021 19493 -6475 340
    2020 16162 -13847 157
    2019 32255 -6657 380

    Totals $132,331.00 -$32,127.00 1968


    Many Boeing supporters, especially in the financial community, love to point out the huge backlog of aircraft BCA has and the potential of earnings in the future.

    For the previous 5.25 years Boeing has delivered almost 2,000 aircraft from the backlog, received a total of over $132 billion and lost over $32 billion.

    • That’s because average margins on units in inventory aren’t high enough to cover costs.

      Zero times N is zero…no matter how big N is.

      • +1

        It’s remarkable how resistant some are to understanding this.

  22. Southwest to pull out of some markets due to Boeing Production problems.

    I guess that business school decisions to put all your eggs in one basket by multiple LUV CEOs is costing the company 100s of millions of dollars. If you do not read the link, it does list some of the airports SW will not be serving and they ain’t like BumFork, North Dakota. At least the good old boys got in a round of golf or two when they made sure the MAX would not require additional pilot training.

    • Just like their friends up north (“Proudly All-Boeing”) and over in the Emerald Isle (Cryin’Air).

      O’Leary is also cutting lots of routes. No wonder he’s trying to buy more A320s for his LaudaAir unit. Apparently, he’s a horse man…but he bet the house on the wrong horse this time.

      • That has been the LCC & ULCC M.O. and every carrier is subject to it’s whims.

        I’m going to try to be as fair as I can here, because if the shoe were on the other foot, carriers like Easyjet, Indigo, Spirit and others would be in the same boat, had Airbus messed up. It’s just the risk of that business model.

        The trickle down effect is that yes, you might get compensation from Boeing for non-delivery of aircraft, or you might get pricing concessions, but in return you lose market share to those airlines that went the other way, when you can’t grow your fleet.

        You can keep older aircraft past when you thought you’d get rid of them. You can send them in for a heavy check and refurb them. You can pay a little more in fuel costs. It’s all re-jigging and not the end of the world.

        Just costly.

        • Except that…Southwest, Alaska and Ryanair placed big orders for the MAX *after* it became clear that that program was a godforsaken mess.
          They should have known better, but were charmed by (seemingly) attractive terms.
          Big, big mistake.

          • Well, that’s the argument made above, that BA is not discounting heavily. Boeing needed some wins in the bank and it seems like it cost them. Is still costing them…

    • There’s an old Britsh expression: “Penny wise and pound foolish”.
      Even during my years as Airbus PR representative I always believed putting all your eggs in the same basked was not a wise thing to do as regards airliner fleets. You must keep the competition alive at home. It doesn’t have to be a big thing. Perhaps 5% of the fleet will ensure you have both suppliers watching each other and the line is always active if you decide to order more and more from the smaller player. If you have but one, you’re not exactly calling the shots.

      • The best supplier management philosophy I have been engaged in is one where (usually) two major and one minor company form the supply base. 60/30/10 would be a representative distribution of the business. The management aspect is asking the suppliers if they would like to increase their share AND what would be their plan for doing so. A second aspect of the required planning was their preparedness for us substantially reducing production. Having a couple of majors and a minor with plans to be able to shrink or grow served us well.

        • Dang Mike you are talking about actually planing and management.

          That is like so beneath Calhoun.

          • Thanks! It was something outside my silo but that affected me in my role. I paid attention…

      • The problem is that small sub fleets cost a lot.

        A smaller operation can’t afford that in this day and age.

        United is an example of having a large enough sub fleet(s) that it can have scale and mitigate issues with one mfg or another. Delta is even more diversified.

        So Ryan Air, South West could easily do a split fleet. Alaska Airlines is probably in that iffy ground where it does not have the scale needed for a split fleet.

        In this case everyone is in the same boat and you keep your older aircraft and or lease older ones as there are not enough new ones.

        That 70 that are destined for China? Yea, China better grab them if they want them as their value has just gone through the roof.

    • Just having a look at the SWA thing. The C-suite are a bunch of MFers…

      The software travel screw up cost them some $425 million, which is directly related to mgmt using an older system and not updating, to save $$$.

      While the BA struggles does play a part, SWA wants to cut 2,000 employees.

      ‘Two thousand employees will also lose their jobs, and the airline expects to receive only 20 aircraft this year, 26 fewer than previously expected. ‘

      ‘But Southwest, which operates an all-Boeing fleet, is one of the hardest-hit. It now expects its total seat capacity to rise 4% year-on-year in 2024, compared with 6% growth estimated earlier.’

      So you lose 2% in capacity and you cut 2,000 jobs? You’re still increasing you ASM by 4%.

  23. “IndiGo places order for 30 wide-body A350-900 planes”

    The airline, which is expanding its international presence, has till now been operating only narro-body Airbus aircraft except for two Boeing 777 planes leased from Turkish Airlines for operations on the Istanbul route”

    So, looks like the airline lost its initially-reported interest in a potential 787 order…one can only wonder why on earth that might be.

      • Not sure how well wide body aircraft in an LCC model will work. We’ll see, I guess.

          • Has Indigo found any lessor to finance them? How many?? Which airline(s) would suffer the most??

    • Airbus is hard at work, delivering on that massive backlog to Indigo. According to wiki, Indigo is getting close to receiving it’s 300th Neo from them. Only some 950 to go.

      If the Airbus average margin, after everything is paid for, is only $1 million per aircraft, that $1 billion in profit, from this customer alone.

      You just hope that Indigo can keep it together…

  24. “Airbus in talks on China jet order ahead of Xi visit, sources say”

    “PARIS/BEIJING (Reuters) -Airbus is in talks with China over a potentially major aircraft order ahead of a visit to France by Chinese President Xi Jinping, two people familiar with the matter said.

    “The Chinese leader is due to make his first Europe trip in five years next month and diplomatic sources have said trade will be high on the agenda, amid mounting EU-China tensions.

    “China has historically signalled large jet orders timed to coincide with state visits, but the negotiations between Airbus China’s CASC buying agency are expected to go down to the wire and are not guaranteed to result in a deal, the people said.

    “One of the people said a package could involve hundreds of jets, but the other cautioned talks are at a preliminary stage.”

  25. Mentour has speculated on the need for a Jumbo replacement, and Tim Clark is pushing for it as well, as an smaller plane for him is leaving money to the competitors, not only one leg but on two legs.
    Boeing is preoccupied, and while Airbus could be tampering with a 320 replacement, they could also be the one to offer a jumbo to Tim Clark. With the market being back slot restriction and likely lack of pilots and airports outside EU and US, it could fare differently than the A380. Also as he said, planes of this size are unlikely to meet heavy CO2 emission requirements but can likely do with SAF or a E-fuel. The A380 never had the 747 freight capability, but what are Airbus options? A 380neo would be easy incl on approvals, but A would have to make a new line.
    The alternative is an double-decker of the 350 with a Ultrafan, but be more heavy on approval, but would also be able to be sold for more uses as the 747 was, if made for it.
    Can one or both of these have a positive business case for Airbus and what is the low-hanging fruit?

    • The answer is No and there are no low hanging fruits.

      You don’t just add a deck to an A350 or any other aircraft.

      When you are done its an all new aircraft.

      What the Airlines figured out was you just don’t get your desired time of arrival that everyone else wants.

      You fly more frequencies with as best staged times as you can.

      You can mix a 777/A350 with a 787 or various multiples.

      • “What the Airlines figured out was you just don’t get your desired time of arrival that everyone else wants.

        You fly more frequencies with as best staged times as you can.”

        Tell that to Tim Clark, expert!!

    • The slot restriction argument was the same one used for the A380 and how that would be a game changer – until it wasn’t.

      Airbus: Once bitten, twice shy.

      It sounds like Emirates wants an aircraft made specifically for them.

      • We’ll have to revisit the death of the A380.
        did it falter on being really “useless”
        or on a perfectly waged PR counter campaign?

        The Emirates a380 utilising 2 hub system connected by addidas network
        is quite a bit superior to the Boeing pushed P2P offer.

        If 380 are staying in service and customers ask for a similar product my judgement would go to the “perfectly wielded PR campaign”.

        the PR induced cerebellum decission is invariable leading to time delayed cold turkey on the ratio side.

      • Frank P:

        Spot on. But then Emirates thinks the sun rises and sets on them.

        Same stupidity that put different and badly performing engines on the A380 and resulted in a split fleet and by far the worst engine.

        Its worth keeping in mind that Boeing is not the only one shooting itself in the foot.

        I well remember the absurd claim by TC that the new and improved uber magic Trent 900 would be 5% better SFC than the GP7000.

        Wow, you are 2% behind in SFC, more maint costs that do not offset it and out of the blue on an old engine you get 7% gain SFC.

        Talk about a sad joke.

  26. FG: Airbus raising monthly A350 production to 12/month from 10 in response to strong widebody demand

    Airbus posted higher revenue and profit for the first quarter, backed its goal to deliver more planes this year than in 2023 and decided to increase production of its A350 wide-body jets, extending its lead over beleaguered rival Boeing. […]

    For 2024, Airbus said it continues to expect adjusted EBIT between EUR6.5 billion and EUR7 billion. Free cash flow before customer financing–a closely watched metric by analysts and investors–is projected at around EUR4 billion.

  27. What caused the delay of 777X TIA?
    Possibly connected with the original 777 TC have to be re-validated in wake of Max findings?
    FAA is still awaiting receipt of all data requested from Boeing?

    • I wonder who that outfit will choose as CEO, to preside over their twilight years.

      • Well, when sailing into a Chapter 11 sunset, it might be a good idea to have an accountant on board 🤔

        Perhaps that explains Mr. Calhoun’s preferred candidate.

        • Yah, I am thinking similarly, Abalone. It all depends on what the objective is, no?

    • In the auto industry we strive not to make cars but to develop processes that make cars. Boeing needs to use their (already established) processes to make planes. Stop doing deviations trying to meet arbitrary build rates.

  28. Boeing Credit Outlook Gets Gloomier as Fitch Also Turns Negative

    The new outlook also incorporates Fitch’s view that Boeing could issue new debt to guard against early 2025 cash-flow risks. […]

    Fitch said it could stabilize its outlook if Boeing delivers more than 100 of its already-built 737 Max from inventory and half of its inventoried 787 Dreamliners by early next year while boosting 737 production toward 38 jets per month. […]

  29. Business Week:
    “Dave Calhoun, Boeing Co. Before he became his company’s final embarrassed and regretful chief executive, he co-wrote a handbook for aspiring business leaders. The 2010 book “How Companies Win” talked about the importance of offering customers innovative products they didn’t even know they needed. The losers were those who continued to produce the same things every year.

    Calhoun’s Boeing was not among the clear winners. In addition to losing more than $23 billion during his four years as CEO, he also lost the trust of passengers, the patience of airline customers and the tolerance of regulators. With Calhoun’s departure from office at the end of the year, the fiction that he was the right leader to correct this situation was destroyed. And that could be a good thing for the company in the long run.

    Boeing was once known as an iconic American manufacturer whose name was synonymous with engineering excellence, until two 737 Max crashes in 2018 and 2019 and the shocking explosion of a Max door panel earlier this year. Calhoun is a protégé of General Electric (GE) leader Jack Welch, who educated the American business community on efficiency, speed, offshoring and anti-unionism. Calhoun, 66, who graduated from Virginia Tech with a degree in accounting in 1979, managed private equity investments for buyout firm Blackston. One of his former aides at television ratings company Nielsen, a Blackstone investment, later praised Calhoun for cutting costs by more than 25 percent.

    Calhoun replaces Dennis Muilenburg, who served on Boeing’s board for 10 years before being ousted in January 2020 for downplaying design flaws that caused the Max’s faulty software to crash into the sea off the coast of Indonesia and into a field in Ethiopia, killing 346 people. He took over the task instead. The experienced name, who was careful to draw a clear line between himself and his predecessor, often talked about how they made safety their first priority after accidents. He announced that he was assigning his top leadership team to monitor for anomalies on every flight around the world.

    In November 2022, Calhoun, which hosted investors at the factory near Seattle where the Max is produced, declared that it was leading a major industrial transformation. The factory was producing 31 Max planes a month after the planes were grounded for nearly two years due to accidents. In one of Calhoun’s many overly blunt Welch-like statements that now sound like defying fate, he dismissed concerns that the wave of layoffs, buyouts and retirements after the pandemic had gone too far. “Exodus of our experienced talent from here, there and everywhere, blah blah blah. “I see it as the exact opposite,” he said.

    Within a year, the manufacturer of the aircraft’s fuselage, Spirit AeroSystems Holdings Inc. reported problems such as incorrectly drilled holes in a cabin component and poorly installed fittings in the tail. In October, Alaska Airlines Inc. In one Max delivered to Boeing, workers at Boeing forgot to reinstall four bolts holding in place a piece known as a door plug, which was removed so that three contractors from *temporary staffing companies* hired by Spirit could rework defective rivets. Luckily, the shirt of a young man with his seat belt on was pulled through a hole opened mid-flight on a Max jet. Calhoun used production jargon to describe the incident as “a lapse in quality,” a description that later became a trove of jokes for TV comedians and internet influencers. […]

    • @ Pedro: Do you have the URL to the Business Week story you posted about?

        • New plane…not so fast

          Remember, the outgoing Boeing CEO Calhoun 100 year program philosophy!

          Riddle me this….Boeing Renton just place an order for new Wing Riveters (order of 6 with option for 2) to go on the existing 737 track systems which just got updated (new track liners).

          The WRS order (e.g. $100 million plus) is replacing the 1960 vintage wing riveters which Renton themselves have been upgrading and updating (electrical and mechanical) for the last 40 years

          So the new WRS have a life span of 20 years before any updates are needed……..this leads to the question on why invest $100 million plus into new Wing Riveter Systems when you can simply keep updating the current ones in the next 10 years for about 15-20% of the cost of new machines?

          Because the 737 program will go into the late 2040’s before being replaced?

          • Good info and call. From my POV there will be no New Boeing Airplane; not in any foreseeable timeframe, anyway.

            I think that’s what Mister Calhoun’s comments awhile back
            were about: reassuring WS that Boing would not be “wasting money” on a new airplane. “Not even getting
            to the drawing board this decade” I think were his words
            (well-sourced corrections are welcome).

          • Just fyi, 99 out 100 people would have chosen a another company to do this job, but Boeing Renton is the 1 percenter that choose a company that really never done large complex automatic fastening systems (e.g. some small drilling machines)

            Hopefully Renton has done their due diligence on the 1960’s 737 WRS foundation (140ft wood pillars) for loading capacity! The current 737 WRS have been upgraded from 72 inch C Frame several time to 96 inch C Frame (heavier), now one can assume the new WRS will even be larger and heavier….good luck with that…comes down to loss of tribal knowledge at Renton

  30. So who’s worse: Shanahan or Pope? Both products- nay, exemplars- of a failed and discredited business culture.. so Let’s Do More of That!

    Boeing Klown Kar..

    • Adding: that Fortune piece is one big piece of narrative-shaping junk,
      working from false premises to flawed conclusion. (Business-writer hacks, yeesh) The author’s attempt at presenting 30-year Boing insider Shanahan as some unsullied outside saviour is a hoot.
      I especially enjoyed the fawning author’s description of Shanahan as “hunkering” and “swooping down”. “Ooh baby, My Hero!”

      Still rearranging those deck chairs big-time at Boing, AFAICS.

  31. While Boeing posted a $355 million pre-tax loss, what concerns me most is the free cash flow loss of $4.0 billion. this was the result of a gross cash flow of $1.1 billion and a gross investment of $4.7 billion. The $4.7 billion was driven primarily by an increase in inventory of $4.1 billion.
    How did the Company fund this deficit? Through a reduction in cash and marketable securities in the amount of $8.4 billion. This was also used to fund debt repayment of $4.4 billion. The cash and marketable securities declined from $13.2 billion to $4.8 billion in the first ninety days of 2024.
    The Company’s debt currently stands at $47.9 billion. With its current production rate combined with a weaker competitive position vis-a-vis Airbus, what are the Company’s plans to afford $50 billion for a new airplane?

  32. $50,000,000,000 here, $50,000,000,000 there, it starts to add up.
    A new plane from that Keystone Kops outfit is a chimera.

  33. “Analysis: Air China Backs COMAC With 100 C919 Deal

    With China Eastern Airlines and Air China having already secured orders for 100 C919 aircraft each, will China Southern Airlines be far behind?”

    “This is expected to further increase to approximately 40-70 aircraft per year from 2025 to 2027, reaching 100 around 2030.”

    The problem at the 8 a month rate for the C919 by 2030, the original production equipment that is currently available only can produce 4 a month!

    So does Comac go a back to western production equipment suppliers to purchase more machines/tooling to increase capacity or try to duplicate what they have with Chinese suppliers? (e.g. what Comac did on the second FAL for the ARJ21)

  34. BA’s own goal??
    “Boeing capitalized by persistently convincing the Federal Aviation Administration to narrow its scrutiny of the company’s factory floor, former employees of the company and its chief regulator told The Seattle Times. With each passing year, the FAA ceded a little more of its authority by deputizing manufacturers like Boeing to police the quality of their own work.”

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