Boeing has been dealing with stormy weather lately, especially following several mishaps involving its aircraft. Boeing’s aircraft manufacturing has slowed significantly in response to increasing scrutiny from regulators, airlines, and lawmakers following a January incident in which a door plug blew off an Alaska Airlines plane while in flight. A mid-air blowout on a new 737 MAX in January followed by several other incidents has kept the stock price of Boeing on its way down so far in 2024.
In January this year, amid safety concerns following a cabin panel detachment during flight, the US aviation regulator prolonged the indefinite grounding of Boeing 737 MAX 9 aircraft. Later, Southwest Airlines had an engine fire on one of its flights in early April while United Airlines has also had problems on several flights with Boeing aircraft recently.
In May, a Boeing 737-300 airplane went off a runway in Senegal, hurting at least ten people, four of whom were serious. The pilot was slightly injured, however, the majority of the 78 people on board were not injured in the event. A video uploaded on social media and verified by the BBC shows people escaping the burning plane.
Another incident happened in the same month when according to Turkey’s transport ministry, a FedEx Airlines Boeing 767 cargo plane landed successfully at Istanbul Airport even though its front landing gear was not deployed.
Over the last year, Boeing, which is listed on the NYSE, has lost money for its shareholders. Boeing’s stock price has fallen over 15% in the last year and is down more than 30% so far in 2024.
The latest news on Boeing is that the company has offered to acquire Spirit AeroSystems, its 737 fuselage supplier at about $35 per share, Bloomberg News reported on Monday, citing people familiar with the matter. That offer is worth about $4.08 billion, as per Reuters calculations based on Spirit’s outstanding shares as of May 7.
Boeing (BA) is trading at around $177, lower by 1.21%, from the previous day’s close, in the opening hours on Tuesday.
According to Reuters, Boeing has told suppliers it is delaying a key production milestone for its 737 jet family by three months, as it continues to struggle with a crisis that is hurting output. A new Boeing supplier schedule communicated to the industry calls for 737 output to reach 42 a month in September, compared with a previous target of reaching that output in June.
The new supplier schedule calls for output to reach 47 a month in March 2025, compared with January of that same year. Output would reach 52 a month in September 2025, compared with June. The company last month said it would burn rather than generate cash in 2024 and deliveries will not increase in the second quarter as originally expected.
On April 24, Boeing reported their first quarter results and indicated that they will slow down 737 production to drive improvements in quality, During the quarter, the 737 program slowed production below 38 per month. Compared to 113 deliveries in 2023, only 67 planes were delivered in the first three months ending March 31, 2024.
Overall, the Q1, The Boeing Company [NYSE: BA] recorded first-quarter revenue of $16.6 billion, GAAP loss per share of ($0.56) and core loss per share (non-GAAP) of ($1.13) and reported operating cash flow of ($3.4) billion and free cash flow of ($3.9) billion (non-GAAP). The results primarily reflect lower commercial delivery volume.
Boeing stock looks to taxi on the runway a bit longer than expected before it takes off. Shareholders should still keep their seat belts fastened for any sudden volatility in the stock price on the back of any developments.