Kelly Ortberg speaks at the 14th annual U.S. Chamber Of Commerce Foundation Aviation Summit in downtown Washington, D.C.
Kris Tripplaar | SIPPL Sipa USA | AP
Boeing CEO Kelly Ortberg on Tuesday laid out a recovery plan for the company as he faces investors antsy for answers after the plane-maker posted its sixth consecutive annual loss.
Boeing lost $3.86 billion in the last three months of 2024, taking about $3 billion in charges in its commercial aircraft unit and its defense and space business spanning aircraft from the Boeing 767 to the KC-46 tanker to the long-delayed pair of 747s that are set to serve as new Air Force One planes.
Boeing last week released preliminary results showing the loss and revenue that came below analysts’ expectations.
The company’s annual loss totaled $11.83 billion, its largest since 2020, when it was grappling with a grounding of its best-selling plane, the 737 Max, after two fatal crashes and the Covid-19 pandemic.
“While it was a challenging year, we are seeing encouraging signs of progress as we work together to turn around our company,” Ortberg said in a staff memo.
Ortberg, a longtime aerospace executive whom Boeing, hired out of retirement over the summer, said the company is focused on stabilizing output, fixing the company’s culture and refocusing on its main businesses
“We are also preparing for the path ahead by continuing to make investments in our core businesses while streamlining our portfolio in areas that are not core to our future,” Ortberg said.
He is likely going to face questions during the company’s earnings call later Tuesday on progress with potentially spinning off units like its Jeppesen navigation unit.
Here’s what the company reported compared with what Wall Street analysts surveyed by LSEG were expecting:
- Loss per share: $5.90 adjusted vs. $3.00 expected
- Revenue: $15.24 billion vs. expected $16.21 billion
The company last posted a profit in 2018. In addition to the crashes and Covid, it has faced a host of manufacturing defects and cost overruns, and early last year, a near-catastrophic midair blowout of a door panel on a nearly new Max 9 jetliner as it climbed out of Portland, Oregon.
Boeing last week said its results were impacted, as expected, by a nearly two-month machinist strike that idled work on most of its aircraft and lengthened delivery delays to customers, which pay for the bulk of their planes when they’re received. Boeing said it expected to have burned through $3.5 billion in the fourth quarter, a difficult end to what was supposed to be a turnaround year.
After the strike ended, Boeing resumed production of its 737 Max aircraft in December, and earlier this month, it restarted test flights of its 777X aircraft, which haven’t yet been certified by the FAA. Boeing is also working to certify the Max 7 and Max 10 aircraft, the smallest and largest models in the single-aisle Max family.
A Boeing banner and an F-15EX jet fighter during the Farnborough International Airshow, on 22nd July 2024, at Farnborough, England.
Richard Baker | In Pictures | Getty Images
While airline CEOs have largely supported Ortberg, key Boeing customers are still logging the effects of the delivery delays.
American Airlines said over the weekend it made further cuts to its schedule because of late deliveries of new Boeing 787 Dreamliners, which it also planned to use to launch a premium-seat-heavy configuration to capitalize on a consumer shift toward pricier, roomier seats.
It plans to suspend service between Miami and Paris in June and July, and cut down on frequencies between Dallas Fort Worth International Airport and New York’s John F. Kennedy International to London in May, as well as from Dallas to Honolulu in June.
“We’ll be proactively reaching out to our impacted customers to offer alternate travel arrangements and remain committed to mitigating the impact of these Boeing delays while continuing to offer a comprehensive global network,” American said in a statement.
Meanwhile, the CEO of European budget airline Ryanair, Michael O’Leary, said Monday that the company had to cut its passenger traffic goal for the year because of “frustrating” Boeing delivery delays.
Ortberg and other Boeing leaders are likely to face questions during the 10 a.m. ET analyst call about cost overruns and delays in the company’s defense division, including for the Air Force One aircraft, as well as potential tariffs and other policies of the new Trump administration.