The Japan Times - Boeing 2024 plane deliveries tumble on labor, safety woes

The annual figure was well below 2023 deliveries and less than half the 766 aircraft European rival Airbus brought to customers last year.

The figures cap a difficult year for the US aviation giant, kicked off by an emergency landing in January 2024 of a 737 MAX flown by Alaska Airlines after the plane suffered a mid-flight blowout on a window panel.

That incident prompted heavy scrutiny on Capitol Hill and from the Federal Aviation Administration, leading to Boeing cutting output on the MAX while it intensified quality control efforts.

Boeing's operations were also hampered by a more than seven week labor strike in the fall that shuttered two major assembly facilities in the Seattle region. Production did not resume at the plants until mid-December.

Those difficulties meant that Boeing's gap with Airbus in terms of commercial jet deliveries widened in 2024 to the largest since 2020.

The US company has lagged its European competitor since a pair of fatal MAX crashes in 2018 and 2019 plunged Boeing into crisis. Its last annual profit was in 2018.

Getting the company back on track will require Boeing to achieve consistent plane production before ramping up.

In 2025, "the number of planes they produce and deliver is the real thing to watch," said Morningstar analyst Nicolas Owens. "The hope is that the worst is behind them."

Plane deliveries are tied to company revenues, making them a crucial benchmark for financial performance.

- Leadership shakeup -

Heading into 2024, Boeing appeared to be poised for a financial comeback, with the MAX having returned to the air and flown for more than three years without significant incident.

But the Alaska Airlines episode revived major questions about Boeing's operations, ultimately leading to a March announcement that David Calhoun would step down as CEO.

In late July, Boeing named as its new CEO former Rockwell Collins boss Kelly Ortberg, who in October unveiled a plan to cut 10 percent of Boeing's workforce.

Ortberg has spoken of the need for a "fundamental culture change" at Boeing that includes resetting the company's difficult relationship with organized labor, as seen in the bruising Pacific Northwest strike of some 33,000 hourly workers.

After rejecting two earlier offers, workers with the Seattle-based International Association of Machinists and Aerospace Workers (IAM) District 751 approved a new contract in early November that includes a 38 percent wage hike.

- Looking ahead -

In the months to come, Ortberg's company expects to complete an acquisition of Spirit AeroSystems, a major supplier that builds fuselages and other parts for Boeing.

The company will also submit a revised criminal settlement with the US Justice Department over the 737 MAX crashes after a federal judge in Texas rejected a prior proposal.

Boeing may also receive recommendations from the National Transportation Safety Board on lessons learned from the Alaska Airlines incident.

Ortberg has discussed slimming down Boeing's scope as part of a turnaround to boost operations and improve financial performance.

Although he has not signaled plans to scale back Boeing's space program, Ortberg in October pointed to commercial planes and defense as "core" products that "will always stay with the Boeing company."

Investors would welcome efforts to simplify Boeing's mission, but trimming the company's portfolio is "not as needle-moving as getting the 737 assembly line back," said analyst Owens.

Prior to the strike, Boeing was producing far fewer than the 38 MAX planes per month that were previously approved by the Federal Aviation Administration.

Restoring MAX output will be a priority for Boeing this year, along with clearing out built MAX and 787 Dreamliner planes in inventory that were not delivered, said Owens.

Shares of Boeing fell 2.4 percent in afternoon trading.

K.Yoshida--JT