Dive Brief:
- Boeing’s commercial aircraft deliveries saw a slight increase in Q2, producing 92 aircraft, compared to 136 planes year over year as the embattled plane manufacturer works to rebuild its reputation.
- The aircraft titan delivered 70 of its 737s, six 767s, seven 777s and nine 787s. The estimated 32% YoY decline hits hard amid the company’s ongoing public manufacturing struggles and Alaska Airlines’ mid-exit door plug blow out investigation.
- The latest announcement comes nearly two months after Boeing submitted its safety improvement plan and the Federal Aviation Administration said it will continue its increased oversight of the aircraft maker, capping 737 Max production at 38 a month.
Dive Insight:
Boeing’s commercial aircraft orders in the first half are also rough, plummeting approximately 70% from last year’s 527 to 156.
Despite the FAA limiting Boeing’s production cap and the ongoing Alaska Airlines investigation, market research firm Forecast International’s analysis of Boeing’s orders and deliveries suggests that another factor in the company’s low numbers could be due to COVID-19.
The report stated that 2021 to 2023 were Boeing’s recovery years. Prior to two 737 Max plane crashes in 2018 and 2019 that killed 346 people, Boeing delivered 806 aircraft in 2018, “a level that will likely not be recaptured before the 2025-26 timeframe.”
“Most likely, 2024 will be another year of recovery on the deliveries front followed by new records in 2025 and beyond,” Forecast International wrote. “Boeing still has quite a way to go before setting new all-time company deliveries records.”
Boeing’s defense, space and security side also saw a jump in Q2, with a total of 28 aircraft delivered, up from 14 in Q1. However, if a federal judge approves Boeing’s guilty plea deal from the Department of Justice, it could hinder the company’s contracts with the Department of Defense and NASA. By law, companies that have felony convictions may be suspended or prohibited from serving as federal contractors.
However, the aircraft titan has been speaking with DoD about how the plea agreement will affect the contracts, Reuters reported.
“DOD will assess the company's remediation plans and agreement with the Department of Justice to make a determination as to what steps are necessary and appropriate to protect the federal government,” Pentagon Press Secretary Maj. Gen. Pat Ryder said in a press briefing on Monday.
Still an analysis from credit rating and research firm Moody’s said that the guilty plea will have little effect on Boeing’s finances or operations as the aircraft maker was already planning to invest in improving its manufacturing operations.
Moreover, much of the equipment and technologies Boeing provides for DOD and NASA are essential.
“Switching costs to replace with another contractor, if possible, would be high and an inefficient use of already limited DoD and NASA budget dollars,” Moody’s wrote
