Boeing Co, one of the leading aircraft manufacturers globally, reported a substantial loss of $3.8 billion in the fourth quarter of 2024. This downturn is attributed to a series of operational challenges, including a significant machinists strike and ongoing technical difficulties that have beleaguered the company since the fatal crashes in 2019.
This loss contributes to the more than $35 billion Boeing has lost since the tragically catastrophic accidents involving the 737 Max jets, which resulted in 346 fatalities. These events cast a long shadow over the company’s efforts to stabilize and regain the trust of both investors and consumers.
During 2024, Boeing recorded a total loss of $11.8 billion. This was exacerbated by nearly $3 billion in charges stemming from labor disruptions, strategic workforce reductions, and complications across various government projects. According to data firm FactSet, Boeing's loss per share reached a startling $5.46, considerably higher than Wall Street analysts' predictions of $3.08.
The union workers' strike was a key operational hurdle for the company. The strike affected production lines at Renton and Everett in Washington, crucial sites for assembling Boeing’s top-selling 737 Max, 777, and 767 models. The disruption ended after Boeing agreed to wage increases and enhanced employee benefits following more than seven weeks of halted production.
Boeing’s financial report for the fourth quarter included $1.1 billion in charges specifically related to the 777 and 767 programs. Additionally, the company mentioned a $1.7 billion impact due to complications with government contracts, including military refueling tankers and replacement jets for Air Force One.
Revenues also took a hit, with fourth-quarter figures reaching $15.2 billion, falling short of analyst expectations of $15.7 billion. The annual revenue was reported at $66.5 billion, marking a 14% decline from the previous year. Boeing’s delivery capabilities also suffered, with the company managing to provide only 348 jetliners, significantly fewer than the 528 in the prior year, and trailing behind its main competitor, Airbus.
Deliveries of aircraft are crucial for Boeing’s financial health, as they trigger substantial payments from buyers, a vital cash source. However, manufacturing quality issues, notably an incident involving a 737 Max's door plug malfunction upon takeoff, halted production progress. This incident, which occurred on an Alaska Airlines flight, led to the Federal Aviation Administration imposing restrictions on the jet's production until Boeing rectified the identified safety concerns.
The implications of these operational bottlenecks were profound, reverberating through Boeing's sales performance. The company went months without new orders for the beleaguered 737 Max and concluded the year significantly behind Airbus in net commercial aircraft orders, which reflect both placed and canceled requests.
Despite these challenges, Boeing’s stock demonstrated slight resilience, experiencing a marginal increase before the stock market opening. The Arlington, Virginia-based company's current trajectory underscores a turbulent phase, yet it also offers a glimpse into the nuanced complexities facing large-scale manufacturing in the modern era.
The ongoing narrative for Boeing is a compelling intermingling of skilled workforce dynamics, the vital role of comprehensive safety protocols, and the strategic imperatives of restoring business and consumer confidence. As Boeing navigates these choppy waters, the industry's stakeholders keenly observe how one of aerospace's titans will regain altitude.
