LONDON – In what has been seen as an ever-growing black hole for the Seattle-based manufacturer, Boeing has revealed some significant information regarding the 737MAX and 777X programmes in its second-quarter findings.
The firm has reported a 2Q19 revenue of $15.8 billion, which is a reduced revenue of $5.6 billion due to issues with the 737MAX as well as lower 737 deliveries which were “partially offset by higher defence and services volume”, according to the report.
Boeing did say that backlog remains healthy with a value of $474 billion, including net orders being valued at $9 billion.
The commercial backlog is valued at $390 billion out of the $474 billion figure, representing 5,500 aircraft.
2Q19 saw 90 aircraft delivered by the manufacturer, which included around 42 787s.
This is 54% less than compared to the same period last year.
For the first half of 2019, 239 aircraft were delivered, which is 37% less than the 378 unit figure given in the first half of 2018 alone.
Other orders consisted of two 777 Freighters for DHL as well as six 767 Freighter variant aircraft for FedEx.
IAG’s Sales Momentum of the MAX Helping?…
It listed its highlights in the quarter mainly at the Paris Air Show when the International Airlines Group placed a letter of intent for 200 737MAX aircraft.
This deal was supposed to keep the markets at bay and stop it from collapsing over the scandals that have been ongoing.
On this process of MAX recertification, Boeing’s Chairman, President and CEO Dennis Muilenberg offered potential words of wisdom at this challenging time.
“This is a defining moment for Boeing and we remain focused on our enduring values of safety, quality, and integrity in all that we do, as we work to safely return the 737 MAX to service,”
“During these challenging times, teams across our enterprise continue to perform at a high level while delivering on commitments and capturing new opportunities driven by strong, long-term fundamentals”, he added.
Reports have also come out from the Boeing CEO that production will dip to 42 per month or even feature a brief shutdown of the line completely, which would be another blow to the program.
On the 777X, it said that the program “is progressing well through pre-flight testing”, offering what should be a positive outlook in the Boeing sphere.
However, it stated that “while the company is still targeting late 2020 for the first delivery of the 777X, there is a significant risk to this schedule given engine challenges, which are delaying first flights until early 2020”.
Was this expected?…
Given the amount of disruption around the 737MAX with the crashes of Lion Air Flight 610 and Ethiopian Airlines Flight 302, this was definitely expected.
Even with 787 deliveries actually over-taking other aircraft in the commercial portfolio, it will probably be a trend that continues until recertification is approved.
It ultimately means that going into the third quarter, we could see numbers at the same low point, with a slow rate being produced as too many units of the MAX being produced will incur extra storage costs in the long-run.
All eyes will now be on Boeing to see how it responds and whether it can get recertification within quarters three and four of this year.
If not, it is uncertain when Boeing can achieve this process and whether we could see the shutdown of the production until solutions have been made and approved.
As for the 777X, if the first flight is not expected until 1Q20, then entry into service and deliveries for year-end-2020 could be a push.
That being said, with Boeing not rushing the process and willing to delay further, the whole element of safety may actually begin to be understood from Boeing.