In 2024, Boeing found itself grappling with significant challenges that led to a notable decrease in airplane deliveries. The aerospace giant reported the delivery of just 348 aircraft, marking a decline of about one-third compared to the previous year. This downturn can be attributed to a severe crisis stemming from a midair incident involving a blown door panel, which raised concerns about safety and reliability. Compounding this situation was a machinist strike in the fall, which brought production lines to a standstill for nearly eight weeks. These disruptions have had far-reaching implications for Boeing’s operational efficiency and reputation in the competitive aerospace market.
The delivery figures underscore a widening gap between Boeing and its primary competitor, Airbus. While Boeing struggled to fulfill its commitments, Airbus delivered an impressive 766 jetliners last year—the highest number since 2019. This disparity highlights the intense competition within the aviation sector, where timely deliveries are critical to maintaining customer relationships and ensuring financial stability. Despite this robust performance by Airbus, both companies face challenges related to supply chain constraints that hinder their ability to produce and deliver aircraft at the rates desired by airlines around the globe.
Boeing did manage to deliver 30 airplanes in December, signaling a gradual resumption of operations as it returned to producing its flagship 737 Max model. This revival followed the resolution of the machinist strike, which had previously slowed Boeing’s production capabilities. Deliveries represent a crucial financial milestone for manufacturers since payment from customers typically occurs at this stage. Therefore, a slow pace of deliveries could significantly impact Boeing’s cash flow and overall financial health, particularly as the aviation industry recovers from the impairments of the past few years.
The current market landscape is further complicated by a shortage of aircraft stemming from supplier constraints, which has led to soaring lease rates. As noted in a recent report by aviation data firm IBA, rental prices for planes are poised to reach record highs, driven by the limited availability of new aircraft. Boasting 142 gross orders in December alone, Boeing secured commitments for 100 737 Max aircraft from Turkey’s Pegasus Airlines and 30 Dreamliners from flydubai. Despite these successes, Boeing’s net orders throughout the year were 377 aircraft, reflecting adjustments made for cancellations, including the removal of over 130 orders from the defunct Jet Airways in India.
As Boeing prepares to face investors, including CEO Kelly Ortberg and other leaders on January 28, the focus will inevitably shift toward strategies for ramping up production and restoring profitability. The pressure on Boeing to refine its operational protocols and ensure safety compliance has never been greater. Investors will be keen to understand how the company plans to navigate these challenging waters while also ensuring it remains a significant player in the ever-evolving aviation landscape. The path to recovery will rely heavily on Boeing’s ability to address its production hurdles, bolster customer confidence, and capitalize on the growing demand for air travel as global markets rebound.