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AIRCRAFT manufacturing giant Boeing reported a loss of US$11.8 billion US or about IDR192.4 trillion (exchange rate of IDR16,308 per US dollar) in 2024. Boeing’s loss comes as the company grapples with a safety crisis, quality control issues and costly labor strikes.
As quoted by the BBC, Friday (01/31), 2025, Boeing’s loss was the worst since 2020, when the aviation industry ground to a halt due to the COVID-19 pandemic. In the three months to the end of December 2024, when labor strikes affected business, Boeing lost US$3.8 billion.
In addition to problems in its commercial airplane division, Boeing is also struggling with issues affecting a number of defense programs.
According to Boeing CEO Kelly Ortberg, his party is focused on what he calls the fundamental changes needed to restore financial performance and confidence. Boeing had a terrible year last year. In January 2024, a door panel fell off a 737 Max shortly after takeoff, leaving a gaping hole in the side of the plane.
An investigation revealed that the door panel had not been properly bolted down. The incident highlighted serious quality control lapses at Boeing and its main supplier, Spirit Aerosystems.
The incident also reignited concerns about Boeing’s approach to safety. Boeing has struggled to recover from two major crashes of its 737, the 737 Max 8, in 2018 and 2019 that killed 346 people.
The door panel incidents forced Boeing to curtail production as regulators demanded changes on the factory floor and demanded a comprehensive safety and quality control plan.
In August 2024, Boeing named Ortberg as CEO, a veteran engineer brought in to stabilize the company. But he immediately faced serious challenges.
A strike by 33,000 workers, most of them at Boeing’s Seattle facility, shut down two of the company’s most important factories, halting production of the 737 Max, 777, and 767 freighters.
The seven-week work stoppage, which began in September 2024, reflected deep resentment among workers over their pay and retirement benefits. The dispute was resolved in early November 2024 but cost the company billions of dollars.
Boeing took action, announcing plans to lay off 10% of its workforce and began raising more than US$20 billion through a combination of stock sales and loans to protect its credit rating.
Boeing also delayed the launch of the Boeing 777X. The new version of the long-haul workhorse was years late but was expected to enter service in 2025. It will now carry passengers in 2026. Overall, Boeing delivered 348 commercial airplanes last year. Its biggest rival, Airbus, delivered 766.
Boeing’s defense business was less visible, but significant. The unit lost more than US$5 billion, largely due to rising costs on fixed-price military contracts.
“We made progress in key areas to stabilize our operations during the quarter and continue to strengthen critical aspects of our safety and quality plan,” Ortberg said.
“My team and I are focused on making the fundamental changes necessary to fully restore our company’s performance and regain the trust of our customers, employees, suppliers, investors, regulators and all those who rely on us,” he concluded. [sources/photo special]
