US aircraft manufacturer, Boeing has reported a net loss of USD$561 million for the first quarter of 2021, a sixth consecutive quarterly loss for the company. Like the majority of the aviation industry, Boeing has had to deal with a predominantly weakened demand market for passenger aircraft due to the COVID-19 pandemic, alongside a couple of lingering production and manufacturing issues.
Revenue from Boeing’s commercial aircraft division fell from USD$5.59 billion in 2020 to USD$4.27 billion although deliveries for new planes rose to 77 from 50. The Chief Executive of Boeing, Dave Calhoun stated that “the recovery is gaining traction,” referring to markets such as the United States, but still believes that it will be a couple of years for the global industry to return to peak 2019 traffic levels.
In addition to the weakened market for jet airliners from the pandemic, Boeing’s quarterly losses have also been affected by the grounding of its 737 MAX aircraft once again. According to the CEO of Boeing, it had to pause some deliveries of the 737 MAX because of electrical issues on some of the planes. Roughly 100 Boeing 737 MAX aircraft are said to be affected by this new grounding. According to Boeing, the supposed solution is apparently taking longer to fix, which means numerous operators might not be able to use the 737 MAX aircraft ahead of the busy summer travel season. However, the 737 MAX isn’t the only plane that Boeing has had production quality issues with.
In March, Boeing resumed deliveries of its 787 Dreamliner aircraft, after reporting production flaws last year. Internal reports from within the company had disclosed information that many of the 787 Dreamliner aircraft built at Boeing’s facility in Charleston, South Carolina, were simply not built as well as the 787s in Seattle. The company also agreed to pay the Federal Aviation Administration US$1.21 million to settle two cases which allege that managers at the company’s South Carolina plant “exerted undue press or interfered with the work of FAA designees.”
One notable airline, Qatar Airways, has instructed Boeing that it will only accept 787s from Boeing’s Seattle facility and does not want any aircraft delivered that have been produced at its facility in South Carolina. Meanwhile, overall aircraft orders have remained painfully slow and even borderline non-existent with long-haul international travel still down sharply as a result of the pandemic.
The company stated that it still expects to deliver the majority of its stored 787 aircraft to airlines by the end of 2021. Meanwhile, other airlines have decided to re-negotiate terms with Boeing, with some taking the option to delay deliveries of new aircraft for a couple of years until travel returns to normal levels at a time when new aircraft can be utilized fully.
United and Southwest Airlines both struck new deals for updated aircraft deliveries to expand their fleets and prepare for growth. While in March 2021, Boeing’s new aircraft orders outpaced cancellations for the first time since 2019. The aircraft manufacturer also plans to ramp up production of the 737 MAX and plans to produce 31 aircraft a month in early 2022 and will hopefully be able to deliver its first 777X wide-body jet in late 2023.
Boeing cited that vaccinations and infection rates, US-China diplomatic relations and the remaining 737 MAX regulatory approvals, which still includes China are among the biggest risks to driving demand up for aircraft orders. The company also reported an overall negative cash flow of USD$3.68 billion for Q1 of 2021, which is less than that Q1 of 2020, which was USD$4.73 billion. Boeing ended the first quarter with $63.6 billion in total debt, which remains unchanged from the previous quarter.
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Source: https://aeronewsx.com/boeing-reports-first-quarter-loss-expects-demand-to-increase-2021/?utm_source=rss&utm_medium=rss&utm_campaign=boeing-reports-first-quarter-loss-expects-demand-to-increase-2021
