Boeing CEO says company focused on safety, won't discuss financial targets / Photo: © AFP/File
Boeing CEO says company focused on safety, won't discuss financial targets
Boeing will refrain from commenting on its long-term financial outlook while it focuses on quality control after a near-catastrophic 737 MAX flight earlier this month, the company's CEO said Wednesday.
Boeing, which has reported losses the last five years, had previously targeted 2025-26 as a time frame for returning to pre-pandemic levels of financial health.
But Chief Executive Dave Calhoun refused to confirm or withdraw those forecasts as the company seeks to bolster quality control following a January 5 Alaska Airlines incident.
"We're going to pause it as long as we need to pause," Calhoun told CNBC.
"Let's take the pressure off everybody," he said, adding that the company will discuss its forecast "when the time is right."
Calhoun said the company welcomed visits by airlines to its Seattle manufacturing plant as it seeks to "restore confidence at every level."
The comments came as Boeing reported a $23 million loss in the fourth-quarter, which was smaller than expected. Revenues rose 10 percent to $22 billion.
For all of 2023, Boeing lost $2.2 billion, its fifth straight loss in a slump that began with the lengthy grounding of the 737 MAX following two fatal crashes in 2018 and 2019 that claimed 346 lives.
The company's earnings press release did not address medium-term financial forecasts in light of the latest crisis, which will slow plane deliveries.
US air safety regulators grounded some MAX 9 planes for three weeks following the January 5 incident, in which a panel on the fuselage blew out, necessitating an emergency landing.
The Federal Aviation Administration last week cleared the jets to return to service following inspections. But the agency said it would not permit Boeing to boost production on the MAX until the company improves safety and quality control.
Boeing's MAX production reached 38 per month during the fourth quarter, up from 31 earlier in the year.
The company has planned to boost MAX production to 50 per month in 2025 or 2026, resulting in about $10 billion in annual free cash flow.
Analysts have questioned Boeing's ability to reach those targets in light of the FAA's latest stance.
Calhoun noted that the company typically updates financial forecasts at the start of the year, but "now is not the time for that," he said in a letter to employees.
"We will simply focus on every next airplane while doing everything possible to support our customers, follow the lead of our regulator and ensure the highest standard of safety and quality in all that we do."
-'More work to do' -
A long-time Boeing board member, Calhoun was installed as CEO following the December 2019 ouster of Dennis Muilenburg, who was widely criticized for his handling of the MAX.
Calhoun has worked to restore Boeing relations with the FAA and customers, but acknowledged that the January 5 incident showed the job was not finished.
"We've taken significant steps over the last several years to strengthen our safety and quality processes, but this accident makes it absolutely clear that we have more work to do," Calhoun said.
In the press release, Boeing pointed to actions taken to strengthen quality on the 737 program, including extra inspections, supporting expanded oversight from customers and pausing operations for one day to focus on quality.
On January 16, Boeing named retired Navy Admiral Kirkland Donald to oversee a review of Boeing's quality management system.
Shares of Boeing rose 3.8 percent in early trading.
(H.Leroy--LPdF)
