From the accidents of the 737 MAX to the misadventures of its jumbo jets, Boeing is struggling to emerge from the most serious crisis in its history. On the first day of the Farnborough Air Show on Monday, the American giant sought to make an impression by signing large contracts.
The American company Delta first placed a firm order for 100 units of the 737 MAX 10, Boeing’s medium-haul aircraft, which represents an amount of 13.5 billion dollars at the list price. The agreement also provides an option for the purchase of 30 additional aircraft. The Japanese carrier’s holding company ANA has confirmed the acquisition of 20 MAX 8 aircraft (US$2.4 billion at list price) with an option for 10 more aircraft. The contract was already in Boeing’s order book, but the buyer had not been disclosed. “We are proud of the quality of our customers and their business skills,” said Boeing boss Dave Calhoun, interviewed on CNBC after the announcement.
For Mr. Calhoun, the order from Delta, the last major American company to buy MAXs, is a sign of renewed confidence in Boeing’s flagship model. The group intends to prove that the setbacks of the device, grounded for 20 months, from March 2019 to December 2020, after two fatal crashes, are behind it.
Since the return to the skies of the MAX, Boeing has tried to make amends with the American authorities and regulators, partially acknowledging its responsibility in the accidents and paying several billion dollars to settle the lawsuits.
The MAX and other Boeing models, however, remain weakened by global supply chain disruptions, staff shortages and the Ukraine crisis, which could weigh on increased production rates. Boeing is currently building an average of 31 MAXs per month.
The fate of the MAX 10, the largest and most recent medium-haul version, is in the hands of the US Congress, which must decide by the end of December whether or not to grant an exemption from a law imposing new standards for the crew alert system. Mr. Calhoun hinted in a recent interview with Aviation Week that the company could forfeit the MAX 10 if it does not obtain a waiver or is not certified by the end of the year. A lack of certification would imply additional training for pilots, which would make the model more expensive for companies, which could turn away from it.
Accumulation of expenses
In the widebody market, most deliveries of the 787 Dreamliner have been frozen since manufacturing defects were discovered in the summer of 2020. As for the future version of the 777, the 777X, its certification has again been postponed. to 2025 to meet regulatory requirements.
“When we are not producing, it is difficult to obtain orders”, underlined Sunday in London Stan Deal, president of the commercial division of Boeing, about the 787. With 51 planes delivered in June (including 43 MAX) , Boeing still had its best month since March 2019.
Not yet recovered from the pandemic, the group accumulated expenses in the first quarter (war in Ukraine, renegotiation of the presidential plane contract Air Force One, etc.), and its debt amounted to nearly US$58 billion at the end of March. “Financially, the company is not in an existential risk”, affirms Michel Merluzeau, of the specialized cabinet AIR, which estimates that certain programs, in particular in the sector of defense, will be profitable on the long term.
Boeing also has ambitions in the conquest of space. Its Starliner capsule, which is to transport NASA astronauts to the International Space Station, passed a key test at the end of May after many adventures, but faces SpaceX, Elon Musk’s company.
There remains the question of the launch of a new model to fill the market segment between the MAX and the 787 and compete with the Airbus A321, in particular its very long range version.