Boeing Suspends Financial Outlook as It Focuses on Safety

Boeing said on Wednesday that it would not provide a full-year financial forecast, the clearest indication yet that the company is trying to assure customers that it is prioritizing safety amid growing concerns about its popular 737 Max jets.

Even as it announced its quarterly earnings, the company chose to concentrate instead on discussing quality control and accountability. Boeing is trying to stem the fallout from an incident less than four weeks ago during which a hole blew open on an Alaska Airlines 737 Max 9 plane shortly after takeoff.

“My focus is on Alaska Airlines Flight 1282 and the actions we are taking as a company to strengthen quality and earn the confidence of our customers, the confidence of our regulators and the flying public,” Boeing’s chief executive, Dave Calhoun, said on a conference call with Wall Street analysts.

“We caused the problem, and we understand that,” Mr. Calhoun added without specifying what Boeing got wrong. “Over these last few weeks, I’ve had tough conversations with our customers, with our regulators, congressional leaders and more. We understand why they are angry, and we will work to earn their confidence.”

With federal officials still investigating the Jan. 5 incident, Boeing’s executives had been grappling with how much to emphasize its efforts to improve safety while also reassuring shareholders about its financial performance. Quality concerns have taken on new urgency after news accounts, including a report in The New York Times, that Boeing workers had opened and reinstalled the panel that blew off the plane, known as a door plug.

The incident terrified passengers and forced the pilots to make an emergency landing in Portland, Ore. It renewed concerns among some aviation experts that Boeing has long focused too much on increasing profits and enriching shareholders through buybacks and dividends and not enough on engineering and safety. Experts raised similar concerns after two crashes of 737 Max 8 planes killed nearly 350 people in 2018 and 2019.

The effects of the incident on Boeing’s financial performance are not yet known: The results it announced on Wednesday were for the three months that ended Dec. 31.

In its earnings release on Wednesday, the company said it was producing 737 Max jets at a rate of 38 per month at the end of the year. It had hoped to increase that rate to 42 per month this year.

But the Federal Aviation Administration said last week that it was limiting Boeing’s ability to increase production of all 737 Max planes, including approving any additional assembly lines, until the company proved that it had resolved its quality control issues.

On Monday, Boeing also pulled its request for an exemption from certain safety standards for the 737 Max 7, a plane that the F.A.A. has not yet certified. Boeing had been hoping the F.A.A. would allow the Max 7 to fly passengers while the company worked on fixing an issue related to the model’s anti-icing system but had faced mounting opposition to its plan after the incident on Alaska Airlines.

The company said Wednesday that it lost $30 million in the fourth quarter, an improvement from a loss of $663 million a year earlier. Revenue rose to $22 billion, from about $20 billion a year earlier.

The National Transportation Safety Board is expected to release a preliminary report on the Alaska Airlines incident in the coming days.


Related posts