Virginia: Boeing has faced significant challenges in 2024, losing nearly $1 billion every month. The aerospace giant reported an annual loss of $11.8 billion, marking its worst financial performance since the pandemic grounded the aviation industry in 2020. The situation worsened in the final quarter of the year, with the company losing $3.8 billion amid ongoing strikes and operational disruptions.
Challenges Affecting Boeing’s Performance
Boeing’s troubles stem from a series of safety crises and quality control issues, particularly within its commercial aircraft unit. The company’s defense programs have also faced difficulties, compounding the financial strain. CEO Kelly Ortberg emphasized the need for “fundamental changes” to restore the company’s reputation and financial health.
Safety Incidents Raise Concerns
In January 2024, a troubling incident occurred when a door panel detached from a brand-new 737 Max shortly after takeoff. This incident revealed significant quality control failures at Boeing and its main supplier, Spirit Aerosystems. Investigators found that the door had not been properly bolted on, raising serious safety concerns and drawing attention to Boeing’s historical safety record.
Boeing has been working to move past the shadows of two tragic crashes involving the 737 Max 8 in 2018 and 2019, which resulted in 346 fatalities. The recent door panel incident forced Boeing to reduce production rates and implement comprehensive safety and quality control measures as mandated by regulators.
Leadership Changes and Strikes
In August, Boeing appointed Kelly Ortberg as its new CEO. Ortberg, a seasoned engineer, was tasked with stabilizing the company during this tumultuous period. However, he quickly encountered significant challenges, including a major strike involving 33,000 workers, primarily located in Boeing’s Seattle area.
This seven-week strike, which began in September, halted production of critical models like the 737 Max, 777, and 767 freighter. It was fueled by employee dissatisfaction over pay and retirement benefits. Although the strike was resolved in early November, it had already cost the company billions in lost revenue.
To mitigate its financial situation, Boeing announced plans to lay off 10% of its workforce. Additionally, the company sought to raise over $20 billion through share sales and borrowing to protect its credit rating.
Delays in Aircraft Production
Boeing also faced delays in introducing new aircraft. The highly anticipated 777X, a long-haul aircraft, was already years behind schedule and is now expected to enter service in 2026 instead of 2025.
In total, Boeing delivered only 348 commercial aircraft in 2024, significantly trailing behind its main competitor, Airbus, which delivered 766 aircraft during the same period.
Defense Sector Struggles
Boeing’s defense business has also experienced substantial setbacks, with losses exceeding $5 billion. These losses are primarily attributed to rising costs associated with fixed-price military contracts. Despite these challenges, Ortberg noted progress in stabilizing operations and enhancing safety measures.
Conclusion
Boeing’s performance in 2024 highlights the critical challenges the company faces, from safety concerns to labor disputes. CEO Kelly Ortberg remains committed to implementing the necessary changes to recover and rebuild trust with stakeholders. As Boeing navigates this difficult period, the focus will be on restoring its reputation and improving financial stability.
