May 30, 2024

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Boeing announces a loss of $355 million amid the door explosion crisis

Boeing lost $355 million in the first quarter as it suffered the aftermath of a 737 MAX 9 door exploding in January.

According to the quarterly results to publish On Wednesday, the airline giant's revenues fell 8 percent year-on-year to $16.6 billion. That was actually a better result than analysts expected, who expected a larger loss and revenue of $16.2 billion, according to CNBC. Boeing shares rose 3.5 percent shortly after the start of trading.

Executives said the financial losses reflect a broader slowdown in production as the company changes the way it builds planes.

“In the near term, yes, we are in a difficult moment,” Boeing CEO Dave Calhoun said in a newspaper interview. letter For employees. “Reduced deliveries may be difficult on our customers and our financials. But safety and quality must and will come before all else.

It is the seventh straight quarterly loss for the beleaguered planemaker.

The Jan. 5 explosion of an Alaska Airlines plane has led to a broader reckoning for Boeing, which just five years ago dealt with the worldwide grounding of its iconic 737 MAX jet due to flight control problems linked to two deadly plane crashes.

In recent months, the FAA has repeatedly discovered gaps in Boeing's production quality. Boeing's commercial airlines president, Stan Diehl, has resigned from his position. Calhoun plans to leave by the end of the year.

Federal regulators have barred the company from increasing production, and have slowed its production of the 737 MAX to work on quality control. As a result, Boeing delivered fewer completed aircraft — 83 in the first quarter, down 36 percent year over year.

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Calhoun warned employees that production would slow further as the company worked on quality control.

“We are using this period, difficult as it may be, to intentionally slow the system, stabilize the supply chain, fortify our plant operations, and position Boeing to deliver the predictability and quality our long-term customers demand,” Calhoun said in a statement. the message.

Boeing expects production to return to “normal” in the second half of the year, Calhoun told CNBC on Wednesday. Ultimately, Boeing still expects to meet the long-term cash flow goals it had before the current spate of problems, he said.

Boeing's production problems extended to the aviation sector. United Airlines reported that the emergency grounding of a Max 9 cost it $200 million in the first quarter. Southwest said it received fewer Boeing aircraft deliveries than expected, which may require it to reduce the number of seats it offers and rethink its spending.