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Boeing has recorded a US$355 million net loss in the March quarter amid the fallout from the Alaska Airlines 737 MAX 9 incident in January.
The planemaker has attributed the sea of red ink to a fall in 737 deliveries, as well as the grounding of the 737 MAX 9 after a door plug blew out on an Alaska Airlines plane at the start of the year. Boeing was barred by the Federal Aviation Administration (FAA) from ramping up MAX production.
Revenue at Boeing was $16.6 billion, down eight per cent on the first quarter of 2023, with operating cash flow $3.4 billion in the red. The losses are being driven largely by the Commercial Airplanes division, with Defence, Space and Security, as well as Global Services, both in the black.
In an earnings call with investors, Boeing CEO Dave Calhoun, who is set to step down by the end of the year, said the company has taken “dramatic action” to lift its quality standards following the incident, which left Boeing facing a criminal investigation.
“We immediately and transparently began supporting the NTSB to identify the cause of the accident. We supported the FAA investigation of the 737-9 fleet in its entirety to do comprehensive airline inspections and the aircraft were cleared to go back into service,” he said.
“We immediately acted working alongside our supply chain to ensure the door plug depressurization event doesn’t ever happen again.
“We held Quality Stand Downs across all of our production lines in BCA, and sought the advice and counsel of more than 70,000 employees to improve our factory disciplines and adherence to our quality standards. All in all, we collected over 30,000 ideas and the list continues to grow.
“We transparently engaged with the FAA and immediately went to work on a 90-day plan of quality action to drive improvements throughout our production system. We completed our 30-day review and we’re regularly checking in with the FAA as we complete our 90-day plan.”
Calhoun added that the company has brought in “independent quality experts” to review its quality control process, who are now 60 days into their work, starting with Boeing’s Renton factory and contractor Spirit AeroSystems. Boeing expects the review to take several years.
“We are absolutely committed to doing everything that we can to make certain our regulators, our customers, and most importantly, our employees and the flying public are 100% confident in Boeing,” said Calhoun.
“While I have shared my plans to step down as CEO by the end of the year, I will be very focused every day on seeing that commitment through.”
Bonza and Virgin Australia are the only Australian airlines to operate the 737 MAX family, with Bonza flying a fleet of six MAX 8s – including two dry-leased from sister Canadian airline Flair – and Virgin Australia having received its fourth MAX 8 in March.
Virgin’s order of 31 new 737 MAX aircraft, including six MAX 8s and all 25 of its MAX 10s, has been delayed by the ongoing troubles at Boeing.
