Seattle, Washington – Boeing faced a significant financial setback in the first quarter, reporting a loss of $355 million due to challenges stemming from a door blowout incident on a 737 Max 9 aircraft in January. Despite the loss, the aerospace giant’s revenue saw an 8% decline year-over-year to $16.6 billion, a result that surpassed analysts’ expectations of a larger loss and revenue of $16.2 billion, reported CNBC. Following the announcement of the quarterly results, Boeing’s stock saw a 3.5% increase in early trading.
The financial struggles were attributed to a broad production slowdown as Boeing implemented changes to its aircraft manufacturing processes. In a letter to employees, Boeing’s chief executive Dave Calhoun acknowledged the difficult moment the company is facing, emphasizing the prioritization of safety and quality amidst lower deliveries and financial challenges.
This marks the seventh consecutive quarterly loss for Boeing, further adding to the challenges the aircraft manufacturer has been grappling with. The January door blowout incident on an Alaska Airlines flight has led to increased scrutiny on Boeing’s production quality, with the Federal Aviation Administration uncovering multiple lapses. As a result, Boeing’s chief of commercial airlines, Stan Deal, stepped down, and Calhoun announced plans to leave by the end of the year.
In response to regulatory restrictions and the need for quality control improvements, Boeing lowered its production output of 737 Max jets, delivering 83 completed airplanes in the first quarter, a 36% decrease compared to the previous year. Calhoun cautioned employees that production would continue to slow as the company focuses on enhancing quality control measures and stabilizing its supply chain.
Looking ahead, Calhoun expressed optimism that production would gradually return to normalcy in the second half of the year, reaffirming Boeing’s commitment to meeting long-term cash flow targets. However, the production issues have also impacted airline partners, with United Airlines reporting a $200 million loss in the first quarter due to the emergency grounding of the Max 9 and Southwest Airlines facing unexpected delivery delays that could necessitate adjustments in seat availability and budget planning.