New York:
Boeing Co said on Wednesday it would not comment on its financial outlook and focus on quality control following a near-catastrophic 737 MAX flight crash earlier this month.
The manufacturer, which has reported losses for the past five years, had previously targeted a return to pre-pandemic financial health in 2025-26.
But Chief Executive Dave Calhoun declined to confirm or withdraw those forecasts as the company seeks to tighten quality controls following the Jan. 5 crash at Alaska Airlines.
“As long as we need to pause, we will pause,” Calhoun told CNBC.
“Let’s take the pressure off everyone,” he said, adding that the company would discuss its forecast “in due course.”
Boeing said in a securities filing that it “cannot reasonably estimate” the impact of the Alaska Airlines incident as it works to meet the expectations of its regulator, the Federal Aviation Administration.
The company lost $23 million in the fourth quarter, less than expected. Revenue increased 10% to $22 billion.
For all of 2023, Boeing lost $2.2 billion, its fifth consecutive loss amid the recession. The 737 MAX has been grounded for a long time after two fatal crashes in 2018 and 2019 that killed 346 people.
Despite the loss, Boeing shares rose 5.3%. The company’s shares have fallen nearly 20% since Jan. 5, ahead of Wednesday’s results.
‘Glad’ about FAA restrictions
The Alaska Airlines accident has put Boeing back in the spotlight, with lawmakers grilling Calhoun on Capitol Hill last week in the company’s most challenging episode since the MAX crashes.
Rhode Island announced a class-action lawsuit against Boeing on Tuesday, accusing the company of making “false and misleading” statements when it pledged to focus on safety issues following the MAX crash.
U.S. aviation safety regulators grounded 171 MAX 9 aircraft for three weeks following an incident on January 5 that caused a fuselage panel to explode and required an emergency landing, but fortunately no one was injured.
The FAA last week cleared the planes to return to service after inspections. Calhoun said airlines have restored 129 grounded MAX 9 aircraft to service so far.
But the FAA also said it would not allow Boeing to increase MAX production until it improves safety and quality controls.
Boeing MAX production reached 38 aircraft per month in the fourth quarter, up from 31 aircraft per month earlier this year.
The company plans to increase MAX production to 50 vehicles per month in 2025 or 2026, generating annual free cash flow of about $10 billion.
Analysts question Boeing’s ability to meet these goals given the FAA’s latest stance.
Calhoun said Wednesday he was “kind of happy” about the FAA’s restrictions “because it’s a good excuse for us to take our time and get things done.”
The increase in MAX production is based on Boeing’s approval of the MAX 7 and MAX 10, which are still undergoing certification evaluation by the FAA.
Boeing announced on Monday that it was abandoning its request for an exemption from FAA safety rules for engine anti-ice systems over the objections of Illinois Senator Tammy Duckworth.
Boeing said it would address the issue through certification. Calhoun said Wednesday the switch will take about nine months of engineering time.
CFRA Research downgraded Boeing on Wednesday, citing “elevated regulatory risks.”
China delivery confirmed
While Boeing’s woes have cast doubt on the MAX’s production prospects, Boeing confirmed it is on track to increase production of its other best-selling plane, the 787 Dreamliner, to 10 aircraft in 2025-26.
The 787 is currently being produced at five aircraft per month.
The company also confirmed that new aircraft deliveries have resumed in China after delivering a MAX aircraft to China Southern Airlines last weekend, the first Boeing aircraft delivered to China since 2019.
The possibility of more Chinese deliveries could give Boeing a boost.
The company has 140 MAX aircraft built before 2023, most of which will be supplied to customers in China or India. Boeing Chief Financial Officer Brian West said it expects to deliver most of the planes in 2024.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)
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