Key facts
- Boeing reported an $8.2 billion net profit in the fourth quarter.
- This is Boeing's third profitable quarter since early 2019.
- The profit was aided by the sale of an airline software unit.
- The FAA has eased production caps on the 737 Max.
- Boeing recently surpassed Airbus in new plane orders.
- Boeing has partially regained the ability to issue airworthiness certificates for certain jets.
Boeing has reported an $8.2 billion net profit for the fourth quarter, marking its first profitable period in over three years and signaling a potential turnaround after nearly seven years of financial losses and crises. The profit was significantly boosted by the sale of a unit that specialized in airline software. This marks only Boeing's third quarterly profit since early 2019, a period that began with a 20-month grounding of its 737 Max aircraft following two fatal crashes which contributed to $47 billion in core operating losses.
Analysts anticipate continued profitability for Boeing as it increases production. The Federal Aviation Administration (FAA) has eased production caps on the 737 Max, which had been in place due to safety concerns. In a significant development, Boeing also recently outpaced its rival Airbus in new plane orders for the first time since 2018. CEO Kelly Ortberg stated the company is building momentum to restore Boeing to its former status.
Boeing is a critical component of the U.S. economy, serving as the nation's largest exporter and a key military contractor. However, the company has faced prolonged challenges, including the 737 Max grounding and pandemic-related sales slowdowns. A recent incident where a door plug detached from an Alaska Air 737 Max shortly after takeoff renewed scrutiny on Boeing's manufacturing safety and led to federal restrictions on its production pace.
Despite outpacing Airbus in new orders, Boeing still trails in jet deliveries, which are more financially significant as payment is tied to delivery. The company also awaits FAA approval for new versions of the 737 Max and its 777X widebody jet, both of which are behind schedule. A potential strike by the Society of Professional Engineering Employees in Aerospace this fall could also disrupt production. Furthermore, Boeing faces the challenge of re-establishing sales in the crucial Chinese market, which have been impacted by U.S.-China trade tensions since 2017.
Boeing has made progress in addressing internal issues, but external factors like Chinese trade relations and new jet certifications remain uncertain. The FAA has partially restored Boeing's ability to perform final safety inspections and issue airworthiness certificates for 737 Max and 787 jets, a privilege previously revoked due to quality lapses. This new model involves a hybrid approach where Boeing and the FAA alternate certification responsibilities, with FAA inspectors embedded in factories. Boeing aims to increase 737 Max monthly output to 42 jets, though the FAA has not yet actively considered lifting the current 38-jet cap.