Deliveries Reach Six-Year High Pace
Boeing handed over 440 commercial airplanes during the first nine months of 2024, up from 291 in the same period of 2023. Management expects total deliveries this year to be the highest since 2018, the last full year before two fatal MAX accidents and the Covid-19 pandemic disrupted operations. Customers typically pay the bulk of the purchase price upon receipt, so the acceleration has been critical to reversing a cash drain that reached nearly $17 billion from January 2024 through June.
Kelly Ortberg, the aerospace veteran who returned from retirement to become chief executive in August, has emphasized tighter coordination with suppliers and more reliable delivery schedules. Several airline clients have recently acknowledged better visibility on when they will receive aircraft, a change from frequent complaints over missed targets in prior years.
777X Charge Reflects Extended Timeline
The $4.9 billion charge on the 777X reflects additional costs and schedule changes for the twin-aisle jet, which is now several years behind its original timetable and still awaiting certification by regulators. Boeing did not provide a definitive entry-into-service date but said further delays are probable as testing and documentation continue.
Regulatory Environment Shows Signs of Easing
Earlier in October, the Federal Aviation Administration raised the monthly production cap for the 737 MAX family to 42 aircraft, up from 38. The restriction had been imposed after a door panel failure during a January 2024 flight prompted intensified scrutiny of Boeing’s quality-control processes. The FAA has also reinstated Boeing’s ability to conduct certain final inspections, signaling incremental confidence in the company’s compliance efforts.
Despite those steps, several key programs remain in limbo. The 737 MAX 7 and 737 MAX 10 variants, as well as the 777X, still require full regulatory approval. Certification delays have forced airlines to revise fleet plans and have weighed on Boeing’s financial outlook.
Labor Dispute Adds Pressure
Approximately 3,200 employees in the defense division’s St. Louis-area facilities have been on strike since the summer, seeking a new labor contract. The walkout affects production of F-15 fighter jets and certain missile systems, adding complexity to Boeing’s efforts to stabilize operations across its commercial, defense and services segments.
Segment Performance Overview
The Commercial Airplanes unit generated $18.25 billion in third-quarter revenue, up sharply from a year earlier, reflecting both higher deliveries and improved pricing on new orders. Defense, Space & Security contributed $6.17 billion, flat year on year amid the ongoing labor action and program-specific charges. Global Services, which provides maintenance and parts, delivered $5.41 billion, benefiting from airline demand for spare components as global traffic nears pre-pandemic levels.
Cash Flow Turns Positive
Operating cash flow reached $0.8 billion, reversing negative figures reported in previous quarters. Management attributed the swing primarily to deliveries of narrow-body jets and an improvement in working-capital efficiency. While positive, the figure remains below long-term targets, and executives indicated that additional progress depends on meeting certification milestones for new models and maintaining supplier stability.
Outlook and Key Milestones
Boeing reiterated its intention to further lift 737 MAX production beyond the new 42-per-month limit, subject to regulator approval and supplier readiness. The company continues to forecast overall 2024 free cash flow to be near break-even, contingent on closing year-end deliveries and resolving the 777X schedule.
Management also cited the importance of reaching a labor agreement with defense workers to maintain commitments to government customers. Discussions with union representatives are ongoing, but no timeline for a resolution was provided.
As Boeing works through development hurdles, market demand remains robust. Airlines worldwide face capacity constraints and are placing orders for both single-aisle and wide-body aircraft to accommodate traffic growth and fleet renewal goals. The company’s backlog stands above 5,600 planes, giving it several years of production visibility once certification and manufacturing issues are resolved.
For now, the quarterly results underscore both the progress in restoring cash generation and the financial cost of prolonged product delays. Achieving consistent profitability hinges on certifying new models, meeting delivery schedules and maintaining regulatory confidence in the months ahead.
Crédito da imagem: Jennifer Buchanan | AFP | Getty Images
