The year commenced with a mid-air incident involving a panel blowout on a new 737 MAX aircraft, revealing serious safety and quality issues. In March, former CEO Dave Calhoun announced his resignation, and now the newly appointed CEO Kelly Ortberg is navigating a contentious situation with approximately 33,000 unionized employees.
The following five charts highlight the escalating difficulties confronting the U.S. aircraft manufacturer:
DELIVERIES
Boeing has lost further ground to its main competitor, Airbus, in the delivery race this year, as production has declined due to quality inspections and audits mandated by aviation regulators.
This decade has already seen Boeing fall behind Airbus due to a series of overlapping crises affecting production.
Deliveries are crucial for aircraft manufacturers, as they receive the majority of payment upon transferring a plane to a customer. So far this year, Boeing has delivered 291 airplanes, compared to Airbus's 497.
CASH FLOW
In the first half of 2024, Boeing has experienced a cash burn of $8.3 billion and anticipates negative free cash flow for the year.
S&P Global projects that Boeing's cash outflow could reach approximately $10 billion in 2024, assuming the strike concludes in the fourth quarter.
The company recorded three consecutive years of negative cash flow from 2019 to 2021, following two crashes and the impact of the COVID-19 pandemic.
Boeing's forward 12-month price-to-earnings ratio stands at 214.7, in contrast to Airbus's 18.8, according to LSEG data. A high P/E ratio may indicate that the stock is overvalued.
DEBT
Boeing's current debt is approximately $60 billion, with over $4 billion due in 2025.
The company has had to rely heavily on borrowing to navigate the overlapping crises stemming from the production halt of MAX jets following the 2018 and 2019 crashes, as well as the COVID-19 pandemic, which severely impacted global air travel.
Earlier this year, Boeing accessed debt markets to raise $10 billion.
STRIKE
Workers at Boeing's facilities in the U.S. Pacific Northwest initiated a strike in September after turning down a labor agreement they deemed insufficient.
The union's chief negotiator informed Reuters on Wednesday that members are willing to endure a prolonged standoff with the aircraft manufacturer following the breakdown of negotiations.
TD Cowen estimates that a strike lasting 50 days could result in a cash flow loss for Boeing ranging from $3 billion to $3.5 billion. The previous strike at Boeing occurred in 2008 and extended for nearly two months.
SHARES
Boeing's shares have declined by over 40% in 2024, attributed to a mix of regulatory challenges, production setbacks, and harm to the company's reputation.
This decline has wiped out around $60 billion in market capitalization. In 2023, shares rose by 36.8%, marking the only year of growth in value during this decade.
Currently, the stock ranks as the second-worst performer in the Dow Jones Industrial Average for this year, following Intel Corp.