Boeing

Global air travel demand has fully recovered past 2019 levels and IATA is forecasting continued growth, especially in Asia-Pacific where Boeing has strong historical relationships with carriers like Japan Airlines and Singapore Airlines. The demand environment for new aircraft has never been better — Boeing just needs to build the planes.

The machinists union contract situation is worth monitoring closely — the IAM District 751 agreement is up for renegotiation later this year and given the current labor environment in manufacturing, Boeing could face significant wage demands at exactly the moment they're trying to ramp production.

The Boeing Starliner crewed spacecraft program is yet another fixed-price contract turning into a financial sinkhole, and now with technical issues delaying the crewed flight test, SpaceX Crew Dragon has essentially locked up NASA's commercial crew business for the foreseeable future. Boeing's space ambitions are becoming a recurring embarrassment.

Dave Calhoun stepping down is being spun as a fresh start but the structural problems at Boeing run way deeper than any single CEO. The engineering culture degradation that started post-McDonnell Douglas merger in 1997 isn't something a new executive fixes in a year or two.

Boeing delivered 40 commercial aircraft in March, bringing Q1 2024 total deliveries to around 83 jets, well below the pace needed to hit any meaningful production recovery target. The FAA's production cap on 737 MAX at 38 per month continues to constrain the top line, and Spirit AeroSystems fuselage quality issues haven't fully resolved.

Boeing burned through another $3.9 billion in cash in Q1 and the balance sheet now shows roughly $58 billion in debt. At some point the interest expense alone becomes a serious drag on any recovery story, and they don't have the luxury of a slow methodical fix.

Does anyone have a realistic model for when Boeing gets back to cash flow positive on a sustained basis? I keep seeing analysts throw out 2025 or 2026 but the assumptions on 737 MAX production ramp seem heroic given the current regulatory environment.

The defense and space segment often gets overlooked in all the MAX noise, but the KC-46A tanker program finally cleared several key technical deficiencies and the Air Force is taking deliveries again. With a backlog north of $60 billion on the defense side alone, there's a floor here that people keep ignoring.

The 777X program delay is now stretching into 2025 entry into service at the earliest, meaning launch customers like Lufthansa and Emirates have been waiting for an aircraft that was originally supposed to fly commercially in 2020. The GE9X engine integration issues compounded an already troubled certification process.

The Department of Justice is reportedly considering whether Boeing violated its 2021 deferred prosecution agreement related to the 737 MAX crashes, which could expose the company to criminal prosecution. This comes as families of crash victims have been pushing back hard on the original settlement terms.

How are people thinking about Airbus as a direct comparison trade here? A320neo family production is ramping and they just raised guidance while Boeing is in the penalty box. Is the relative value case for Boeing compelling or is Airbus just the better business for the next several years?

People forget Boeing still has a backlog of over 5,600 commercial aircraft worth something like $440 billion. Even at depressed delivery rates that's more than a decade of production locked in, and airlines desperately need new fuel-efficient aircraft to replace aging fleets.