Boeing

Share on facebook
Share on google
Share on twitter

Company Profile: Boeing

Boeing is one of the largest aircraft manufacturers in the world and competes with Airbus for leadership in this market. It operates in the fields of commercial aircraft, defence, space, security systems and provides a global after-market support for all their products across the fields. Boeing’s history spans over more than 100 years and it is one of the largest exporters in the United States with clients all over the world. It has 140,000 employees in the USA and in over 65 countries. Boeing claims that it has more than 10,000 commercial aircraft in operation worldwide, or half the world’s commercial aircraft fleet. In addition, Boeing has a strong presence with military and defence products, serving mainly American and its allies’s interests.

Pre-pandemic

Even before the COVID-19 became a worldwide pandemic which shut down the aviation industry entirely, Boeing was already suffering from its own problems which stemmed exclusively from the two accidents with the new B737 Max. These two accidents resulted in the grounding of the entire fleet of B737s and up till then, Boeing was having a steady growth in deliveries and received new orders until 2018. However, by the end of the first quarter of 2019, after the second accident with the B737 Max, Boeing suffered a severe blow as its best-selling product now had doubts concerning its safety and the certification of the project. All B737 Max planes that were in operation were grounded and their deliveries were suspended.

Traditionally, Boeing and Airbus had always led the market globally in terms aircraft deliveries with Boeing having a small advantage over Airbus. However, 2019 was not a good year for Boeing as the data below shows. In 2019, Boeing saw its deliveries of the new B737 Max planes suspended, cancellations of more than 200 units of this model of planes, as well as a loss of new orders.

BoeingSales_122020

Figure 1 – Boeing and Airbus Deliveries up to 2019

(https://rotate.aero/blog/entry/airbus-deliveries-soar-to-record-high-as-boeing-s-crash)

To add salt to wound, the global pandemic situation in 2020 saw Boeing’s finances fall apart while it was already reeling from the significant financial losses of 2019. Boeing saw its income drop close to 25% and suffered huge losses.

Tabela

Descrição gerada automaticamente

Figure 2 – Boeing Financial Year – 2019

(https://s2.q4cdn.com/661678649/files/doc_financials/2019/q4/4Q19-Press-Release.pdf)

During the Pandemic

The detrimental effects of the COVID-19 pandemic on Boeing compared to other companies in 2020 were relatively mild Boeing as the effects were masked by a very difficult 2019. However, the pandemic leaves Boeing in an even more precarious position. Boeing’s revenues had declined even more during the pandemic as did its deliveries and all this while, it had to go through a year of huge losses as they had to spend a lot of money fixing the B737 Max’s problems.

In the financial data presented below, it can be seen that the 2020 numbers were even worse than 2019 due to cancellations and postponements of the company’s orders.

Figure 3 – Boeing Financial Year – 2020

(https://s2.q4cdn.com/661678649/files/doc_financials/2020/q4/4Q20-Presentation.pdf)

As we can see from below, aircraft deliveries were very poor in 2019, and even worse in 2020.

Tabela

Descrição gerada automaticamente
Tabela

Descrição gerada automaticamente

Figure 4 – Boeing Commercial Airplanes Deliveries – 2020

(https://s2.q4cdn.com/661678649/files/doc_financials/2020/q4/4Q20-Press-Release.pdf)

With regard to the new orders, Boeing received numerous cancellations in 2020, with most all the cancellations for the B737 Max. The table below compares Boeing’s new orders with that of Airbus, which also had a reduction in deliveries and orders, but Airbus managed to keep the numbers of deliveries and orders at an acceptable level.

Interface gráfica do usuário

Descrição gerada automaticamente

Figure 5 – Boeing Commercial Airplanes Deliveries and New Orders – 2020

(https://dsm.forecastinternational.com/wordpress/2021/01/18/airbus-and-boeing-report-december-and-full-year-2020-commercial-aircraft-orders-and-deliveries/)

On a brighter note, in the other fields that Boeing operated in, Boeing saw positive numbers and saw strength in the companies operating in these fields as well.

Interface gráfica do usuário, Texto, Aplicativo

Descrição gerada automaticamente

Figure 6 – Boeing Results from other Segments – 2020

(https://s2.q4cdn.com/661678649/files/doc_financials/2020/q4/4Q20-Presentation.pdf)

Fortunately, in 2021, things are looking better for Boeing. Its B737 Max has returned to air in the United States and in other countries and the improvement of the pandemic situation has allowed Boeing to deliver more planes and receive orders again, all these in even greater numbers than Airbus, despite still suffering some cancellations.

Tabela

Descrição gerada automaticamente

Figure 7 – Boeing Commercial Airplanes Deliveries and New Orders – up to Jun 2021

 (https://dsm.forecastinternational.com/wordpress/2021/07/19/airbus-and-boeing-report-second-quarter-2021-commercial-aircraft-orders-and-deliveries/)

With regards to the financial aspects, the results for the first semester of 2021 were also better and expectations forecasted based on the deliveries done seem promising.

Tabela

Descrição gerada automaticamente

Figure 8 – Boeing Financial Results – up to Jun 2021

 (https://s2.q4cdn.com/661678649/files/doc_financials/2021/q2/2Q21-Press-Release.pdf)

Boeing in Asia

Boeing has had a long history with Southeast Asia and constantly continues to invest in the region. The Asian market is constantly growing and usually grows faster than other regions. Boeing estimates a considerable demand for the next 20 years, and for this reason alone, this makes the Asian region is even more attractive for Boeing. Boeing’s main regional headquarters for Asia is in Singapore and the headquarters operates in all its fields. Boeing also has a strong presence in Brunei, Indonesia, Malaysia, Philippines, Thailand, and Vietnam.

Recently, Boeing has said that it is very optimistic about the defence market, especially in the Asian region. It says that it is participating in more than 50 campaigns between aircraft and different military systems with the demand mainly coming from Southeast Asia.

Figure 9 – Military aircraft market Asia-Pacific

(https://www.janes.com/defence-news/news-detail/boeing-bullish-on-asia-pacific-despite-covid-challenges)

China is also important for Boeing and for the aviation market. It is estimated that half of the Chinese fleet is made up of Boeing aircraft, which is a testament of how important China is. However, the current commercial tensions between the United States and China can at times impose, albeit indirectly, some restrictions on the purchases of American planes. Even so, China is undoubtedly a market in which Boeing urgently wants to retake as even in terms of delivery, Boeing did not deliver commercial planes to China in 2018 and 2019 and only delivered 5 planes in 2020.

Boeing’s perspectives for the future

Boeing has already managed to deliver 156 aircraft as of June 2021, which indicates for the company a clear recovery from two major crises for the company. One of the resolved crises, concerning the reputation of the B737 Max which returned to flying in some countries in 2021 allowed Boeing to gradually see its best-selling aircraft return to the skies. The return of the B737 Max also indicates that the pandemic appears to be under greater control. The return of the B737 Max has already guaranteed a relevant number of orders in the first half of 2021, which evidences that some customers were waiting for the definition of the B737 Max to place their orders.

However, Boeing is also now dealing with a technical problem on another of its planes. Problems with the B787 Dreamliner have puts new sales of it on a hold and when considered with the problems Boeing had with the B737 Max,  these technical problems may indeed put a dent on Boeing´s reputation.

Thus, despite better seeing numbers, Boeing’s problems with the B737 Max and now with the B787 have caused several losses for Boeing, which saw them end up losing important customers to Airbus. This may mean that in the short term, Boeing will have a little more difficulty in getting more new orders and consequently the production level of this model (B787) will be lower than desired.

Ultimately, Boeing is making every effort to resolve all issues and win back the trust of old and potential customers. However, Boeing’s struggle is not only with Airbus and the challenges of the pandemic, but also with rebuilding confidence in its planes and, above all, with the safety of their planes. In this regard, Boeing has an even greater challenge than other companies, but to its favour, it has a great structure and over time will probably return to the same level of deliveries and new orders.

Subscribe !

free and exclusive

Articles on aviation