- Boeing has been on an upswing since CEO Kelly Ortberg took over the top job a year ago.
- Wall Street analysts expect the aircraft manufacturer to halve its second-quarter losses from a year ago when it reports earnings this week.
- But Ortberg still has challenges ahead of him, including with ramping up production of jets, which will require FAA approval, and in company’s defense unit.
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Under the direction of CEO Kelly Ortberg, Boeing is stabilizing after spending the majority of the previous seven years tumbling from crisis to catastrophe.
This week, Ortberg, an engineer and seasoned aerospace executive who the manufacturer brought out of retirement to help the troubled company last year, will highlight major advancements since he took over a year ago. On Tuesday, Boeing provides its outlook and quarterly results.
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Investors are pleased with what they have seen thus far. The company’s stock has increased by almost 30% this year.
When the aircraft maker reports, Wall Street analysts anticipate that its second-quarter losses will have been cut in half from a year earlier. In May, Ortberg informed investors that the firm anticipates making money in the second part of the year. Boeing’s aircraft deliveries just reached their highest level in 18 months, and the company’s aircraft output has increased.
It’s a change for Boeing, whose previous executives missed deadlines for aircraft deliveries, certifications, financial targets, and cultural adjustments that irritated both investors and consumers, while competitor Airbus outperformed.
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Richard Aboulafia, managing director of the aerospace consulting firm AeroDynamic Advisory, stated, “After decades of self-inflicted knife wounds, there is a general consensus that the culture is changing.”
Next year, analysts anticipate the corporation to report its first yearly profit since 2018.
Douglas Harned, a senior aerospace and defense analyst at Bernstein, stated, “I was not nearly as optimistic when he got the job as I am now.”
Ortberg had a difficult task ahead of him, but when he got there, it became even more difficult.
As the business lost money, Ortberg promised significant cost reductions, which included firing 10% of the workforce. Before the firm and the workers’ union negotiated a new labor agreement, the machinists who produce the majority of its aircraft went on strike for seven weeks. In addition, Ortberg sold off the company’s Jeppesen navigation division, removed the head of the defense branch, and oversaw a capital raise of almost $20 billion last fall.
Shortly after starting the position in August, Ortberg purchased a home in the Seattle region, which is home to Boeing’s majority of its aircraft, and his presence has been beneficial, according to aerospace analysts.
“He’s showing up,” according to Aboulafia. “You show up, you talk to people.”
Boeing refused to allow Ortberg to be interviewed.
In 2024, Boeing’s executives hoped for a comeback. Five days later, however, a door plug burst out of a brand-new Boeing 737 Max 9 as plane was leaving Portland. Boeing had a production halt, increased Federal Aviation Administration inspection, and billions of dollars in financial losses as a result of the near-catastrophe.
The aircraft was delivered to Alaska Airlines without key bolts. It was the most recent in a string of Boeing quality issues, where other flaws have necessitated laborious reworking.
Boeing was already dealing with the fallout from two fatal Max crashes in 2018 and 2019, which damaged the company’s standing as the biggest exporter in the United States. In May, the business and the Justice Department came to an arrangement to avoid prosecution because of a dispute over a prior criminal conspiracy accusation related to the crashes. When the agreement was revealed, the relatives of the victims blasted it.
As they struggled with delays, executives at major Boeing airline clients publicly criticized the company and its leadership for years. Investors were informed by Ryanair CEO Michael O’Leary in May 2022 that management needed a “reboot or boot up the ass.”
O’Leary had a different tune last week.
“I continue to believe Kelly Ortberg, [and Boeing Commercial Airplane unit CEO] Stephanie Pope are doing a great job,” he stated during an earnings conference call. “I mean, there is no doubt that the quality of what is being produced, the hulls in Wichita and the aircraft in Seattle has dramatically improved.”
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Following the January 2024 door-plug incident, United Airlines CEO Scott Kirby raised concerns about the Boeing 737 Max 10 and the airline prepared to remove it from its fleet plan. Although the aircraft is still uncertified, Kirby claims that Boeing has improved the regularity of its aircraft deliveries.
Although having too few or too many seats on a flight can affect an airline’s revenue, delays for the Max 10, the largest of the Max family, and the uncertified Max 7, the smallest, are still a pain for passengers.
“They’re tackling the appropriate issues. In an interview last month, Southwest Airlines CEO Bob Jordan stated, “Deliveries are much more consistent now.” However, the Max 7 has not been updated. We anticipate that in 2026, we won’t be flying it.
Boeing still needs a lot of work under Ortberg.
Boeing has surpassed the FAA’s production cap of 38 Maxes each month. Boeing will require the approval of the FAA in order to surpass that, reaching a target of 42.
According to Ortberg, the business is stabilizing this year in order to surpass that rate. Higher production is essential since manufacturers are paid when airplanes are delivered.
“I would suspect they would be having those discussions very soon,” Harned stated. “It’s 47 [a month] that I think is the challenging break.”
Boeing has a lot of inventory on hand to help boost production, he continued.
It has also suffered as a defense unit. Programs like Air Force One and the KC-46 tanker program, which have angered President Donald Trump, are part of the defense unit. A used Qatari Boeing 747 may need months of reoutfitting to be used as a presidential aircraft, according to insiders. Trump was annoyed by the delays on the two new jets that were supposed to serve the president.
Last November, Ortberg took over as leader of that unit.
Harned remarked, “They’re not totally out of the woods,”
According to several industry participants, Boeing and Ortberg should also begin considering a new aircraft. Prior to the two crashes, the company was considering a midsize airliner, and its best-selling 737 made its debut in 1967.
“Already there’s been a reversal from ‘read my lips, no new jet.’ I would like to see that accelerate,” Aboulafia stated. “He is the guy to make that happen.”
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