In 2024, Boeing faced a challenging year that resulted in the delivery of only 348 airplanes, marking a substantial decrease of approximately 33% compared to the previous year. This decline can be attributed to a series of operational hurdles, including a troubling incident involving the midair blowout of a door panel a year prior. Such incidents not only raise safety concerns but also lead to increased scrutiny from regulatory bodies, further complicating Boeing’s ability to maintain a steady production flow. Additionally, a machinist strike during the fall significantly stunted production efforts, exacerbating the already existing difficulties faced by the aerospace giant.
As a result of these setbacks, Boeing found itself lagging behind its key competitor, Airbus, which delivered an impressive 766 jetliners in 2024—the highest figure since 2019. This widening delivery gap indicates not only Boeing’s production woes but also the effectiveness of Airbus in streamlining its manufacturing processes amidst similar supply chain challenges. The competitive pressure intensifies for Boeing, highlighting the need for strategic enhancement in its operational capabilities to reclaim its standing in the market.
Despite the obstacles, Boeing managed to deliver 30 airplanes in December, marking a partial recovery as it resumed production of its highly sought-after 737 Max aircraft. The end of the nearly eight-week machinist strike allowed for this resumption, yet the company still faces the critical challenge of fulfilling its backlog of orders. Deliveries hold notable significance for manufacturers, as they represent the point at which customers typically complete most of the payment for the aircraft. Consequently, the urgency to address production delays has become paramount.
The ongoing shortage of available aircraft due to manufacturing constraints has caused a surge in lease rates, with industry analysts predicting record-high rental prices for 2024. This situation places additional pressure on airlines seeking to expand their fleets amid increasing operational costs, complicating their growth trajectories. Analysis from aviation data firm IBA indicates that the rental marketplace is reacting swiftly to these supply constraints, further influencing the dynamics of aircraft demand and availability.
Future Outlook and Investor Scrutiny
In December, Boeing reported 142 gross orders, including significant deals such as 100 737 Max planes for Turkey’s Pegasus Airlines and 30 787s for flydubai. However, Boeing also had to retract over 130 orders related to Jet Airways, signaling potential volatility in its order book. For 2024, Boeing’s gross orders totaled 569, while the net orders stood at 377 after accounting adjustments. As the company gears up for an upcoming investor presentation led by CEO Kelly Ortberg, stakeholders are keen to hear about the strategies that Boeing intends to implement to address production challenges, regain market confidence, and increase profitability in an evolving aerospace landscape.