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Boeing has recorded its second-largest annual loss as the American aircraft manufacturer struggled with an escalating safety crisis and prolonged industrial action that brought 737 Max production to a standstill.
The manufacturing giant posted a staggering fourth-quarter loss of $3.86 billion, pushing its annual losses to $11.8 billion – the highest figure since the pandemic-stricken year of 2020. This financial bleeding comes as newly appointed Chief Executive Kelly Ortberg attempts to navigate the company through troubled waters.
The company’s woes intensified following a catastrophic mid-air door plug failure on a 737 Max and a seven-week strike involving 33,000 factory workers demanding improved pay and working conditions. These setbacks resulted in commercial jet deliveries plummeting to 348 units, down significantly from 528 the previous year.
The financial strain has severely impacted Boeing’s cash reserves, with the company burning through $14.3 billion in 2024, a dramatic reversal from the positive cash flow of $4.43 billion in 2023. The manufacturing slowdown has led to a concerning accumulation of $87.5 billion in supplier inventory, pushing the company’s credit rating precariously close to junk status.
Despite these challenges, Ortberg remains optimistic about production recovery, noting that January has already seen 33 deliveries of 737 jets. The company anticipates exceeding the current regulatory cap of 38 units per month later this year. Ortberg emphasised his commitment to a “multi-year journey” focused on cultural transformation within the organisation.
The market responded cautiously to these developments, with Boeing shares closing $2.73 higher at $177.89, representing a modest 1.6 per cent increase on the New York Stock Exchange.
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