Boeing's Jet Delivery Challenges in 2024
SEATTLE - In a concerning turn of events, Boeing (NYSE: BA) has seen its deliveries of new jets tumble to the lowest level since the onset of the COVID-19 pandemic. After overcoming a crippling labor strike that slowed production last fall, the company showcased a slight rebound in December.
Annual Deliveries Record
According to company announcements, Boeing delivered 348 commercial jets last year, a significant drop from the 528 jets delivered the previous year. Adding to the disappointment, new jet orders for 2024 fell below half of what the company saw one year prior.
Production Slowdowns
This downturn can be attributed to several factors, including production quality issues, heightened regulatory scrutiny, and ongoing supply chain delays. In addition, a seven-week strike impacted the assembly lines significantly, compelling the company to adopt a cautious strategy in resuming production operations after the conflict concluded.
Recent Production Advancements
Fortunately, Boeing's 737 production lines sprang back to life in early December. The company was able to deliver 30 jets in December alone, with a breakdown of 17 737 MAX and 9 787s, marking an increase from the prior months where deliveries numbered 13 in November and 14 in October.
When viewing the full year, Boeing's breakdown showed 260 of the delivered jets were 737 MAX, alongside 51 787s, 18 767s, and 14 777s.
Revenue Expectations
Plane manufacturers typically generate most of their revenue upon delivering an aircraft. New CEO Kelly Ortberg shared with investors in October that he anticipates continued cash burn for the company this year, indicating ongoing challenges.
Order Numbers Decline
Boeing's order figures have drastically diminished, with gross orders plummeting from 1,456 in 2023 to just 569 in 2024. Net orders also took a hit, dropping from 1,314 to 377 after accounting for cancellations and conversions.
Final Orders Count and Market Position
After adjustments for accounting standards, the company recorded a total of 317 net orders last year. The final month of the year saw the company securing 142 gross orders, which included 30 787 orders for flydubai and 100 737 MAX orders from Pegasus Airlines, a known Airbus customer.
In the same breath, Boeing canceled 135 orders previously placed by Jet Airways, following a liquidation order from India's highest court, reflecting further market pressures.
Year-End Backlog Status
Closing out the year, Boeing held 6,245 unfilled orders and 5,595 in its official backlog, after the adjustments mandated by accounting standards. Unfortunately for the American aerospace giant, they were outperformed by their European counterpart, Airbus, which successfully delivered 766 jets in 2024, alongside booking 826 net orders.
This year marks the sixth consecutive year where Boeing has fallen behind Airbus in the competitive race for aircraft deliveries.
Frequently Asked Questions
What caused the drop in Boeing's jet deliveries for 2024?
The decline can be attributed to production quality issues, supply chain delays, a significant labor strike, and stricter regulatory scrutiny.
How many jets did Boeing deliver in December 2024?
Boeing delivered 30 jets in December, which included models from the 737 MAX and the 787 series.
What impact did the labor strike have on Boeing's operations?
The labor strike resulted in a seven-week slowdown of assembly lines, affecting production timelines and overall output.
Who is Boeing's new CEO?
Boeing's new CEO is Kelly Ortberg, who has shared insights into the company's cash flow situation and future projections.
How does Boeing's performance compare to Airbus?
Boeing lagged behind Airbus once again, with Airbus delivering 766 jets compared to Boeing's 348, marking the sixth straight year of this trend.
