Boeing’s 777X widebody program won’t see commercial service until (at least) 2026. And Tim Clark is on a warpath over what’s now a six year delay. He offered, “I fail to see how Boeing can make any meaningful forecasts of delivery dates” at this point. Just last year he increased the carrier’s order book to 256 777X widebodies – adding 55 -9s and 35 -8s at the Dubai Air Show.
Now, he says, unless the aircraft manufacturer can raise the $10 billion it’s seeking in new equity, “I see an imminent investment downgrade with Chapter 11 looming on the horizon” as first reported by The Air Current. Clark has previously called out Boeing over a period of several years for mismanagement.
The massive Boeing 777X! pic.twitter.com/6W2UN3ZpE8
— Jeff Dumps (@elektronenjager) July 29, 2024
Sooo many 777X's not going anywhere ✈️
@Kent_YVR pic.twitter.com/7hMmVhxHs7
— Breaking Aviation News & Videos (@aviationbrk) May 19, 2024
Over 500 planes have been ordered, with first delivery most recently expected in 2026. At least 403 777-9 orders have been reported, along with 43 -8s and 55 -8 freighters. The largest orders came from Emirates, representing about half of the total. Qatar Airways, Cathay Pacific, ANA, Singapore Airlines, Lufthansa and Korean Air are all reported large customers. No U.S. airline has ordered one.
Emirates reveals SkyLounge, the most exclusive Onboard Lounge to be introduced on its Boeing 777X fleet from 2020. A completely transparent lounge with unmatched aerial views and unparalleled luxury, Emirates SkyLounge promises window views like no other. pic.twitter.com/pwtoocM9mN
— Emirates (@emirates) March 31, 2018
A decision on Boeing’s investment grade credit rating by S&P is expected by year-end. It ended September with $10 billion in cash and investments.
At the start of the year, United Airlines CEO Scott Kirby took aim at Boeing’s CEO and that ultimately forced change at the top.
The head of Emirates says things aren’t better. To be sure, his public statements represent strong bargaining over compensation for delays. But he’s also clearly frustrated – they have had to make other investments in their fleet to compensate for delays, and cannot fully deploy their network plans.
Such public dissatisfaction by the heads of commercial partners are rare, and significant.
With less than $10B in cash on hand while burning through a minium of $2B+ per quarter, bankruptcy is imminent for Boeing. Decades of incompetence and greed have left it without a commercial aviation product to deliver (at least one with a significant competitive advantage).
Meanwhile, it has managed to lose $50B in the last 5 years while increasing debt by $30B (to $60B) during the same period.
Incredibly, Boeing has issued $58B in share buybacks and dividends since 2010, which have disappeared into thin air…as it pays $3B/year in debt service. You can’t make this stuff up.
@ Gary — Boeing will not go bankrupt. If they do, every airline (I’m looking at you Timmy) better be on warning that they won’t be getting any more bailouts either.
@Captain Freedom
Please explain how “greed”, a trait of all human beings driven by survival instinct, is in any way related to financial problems at Boeing. It’s such a low effort attempt at sounding like you know what you’re talking about. The only egregious greed is being displayed by the idiot unions, who think a company in desperate need of a win and losing billions can afford their ridiculous demands.
Share buybacks and dividends are how publicly traded companies return money to shareholders (their owners), not “disappeared into thin air”. How leveraged they are also has zero to do with their financial issues. Go take a class in finance instead of getting all your anti-corporate propaganda from huffpo.
Boeing is in trouble because of poor execution and lack of focus, that is all.
The problem is the subsidies, offered at the expense of the US taxpayer via The Import-Export Bank to foreign carriers.
The IE Bank has been soliciting for decades, foreign national airlines to BUY AMERICAN -Boeing Aircraft at steep discounts NOT offered to american carriers. These aircraft are then positioned to directly compete AGAINST american airline carriers- undercutting competition fares jeopardizing continuation of US carriers on these routes. The LOSS TO US carriers is billions of dollars of revenue to foreign carriers. All in the name of “protecting” Boeing manufacturing jobs.
Did you notice no large body aircraft are on the books as sold at Boeing? Perhaps, because the US carriers DO NOT get the opportunity to purchase the Boeing aircraft at the same price as foreign carriers?
Undermining the US aviation industry in FAVOR of foreign carriers at deeply discounted prices for aircraft is absolutely WRONG. Delta Air Lines has been sounding the alarm for decades!
The Import-Export Bank needs to be completely overhauled- to the benefit of ALL American business and NOT just a few- like Boeing.
And the CEO of Emirates needs to take a back seat to the discussion- as his airline has taken advantage of the US taxpayer expense for the sole financial benefit of his airline and a tremendous loss and unfair competitive advantage to US carriers.
Reforming the Import-Export Bank is the only fair and equitable resolution to the disaster the program creates for other American business.
@Captain Freedom … +1 . You are a rational purist . Boeing’s greed is limitless .
However , Boeing , being a defense contractor , will go hat in hand to the government , no ? ( And the government will not embarrass Boeing by bringing up the Osprey .)
@Mantis … Boeing is in trouble because of a lack of engineering education and engineering focus in the Chicago executive suite .
@Mikel … If I was an airline , I would order aircraft that do Not have those stupid luggage bins in the cabin .
@Mantis I think we agree on Boeings lack of execution and lack of focus.
Given Boeing management’s gross management missteps, I find to ludicrous to pin the blame on the unions. Boeing has gone all out to break the power of the unions (see South Carolina). The unions represent if anything a drop in the bucket to the underperformance.
It galls me the a bunch of financial engineers have ruined a real engineering firm that was the envy of the world.
Boeing needs to spin off all their military production to a separate company. Make sure that anything substantially useful in a military setting is included. Do not name it anything sounding like Boeing.
Then package up the commercial remains and open up bidding to anyone in the world who can put a deal together.
One wonders if part of this involves PR in the current strike. One demand is a return of defined-benefit pensions. No company in its right mind would make that mistake. I would like it to be illegal to create a DB pension (particularly if it includes medical benefits). Since we have no real way to know what that would cost Boeing in 30 or more years, it can very well lead to a problem we’ve all seen: Boeing retirees being paid through the government for their Boeing DB pension.
So, will the union drop the DB pension demand if they fear Boeing goes chapter 11 soon after signing?
Tim Clark needs to stop being so anti-American and it’s about time he retires. Imagine leading a foreign airline as an American and still not being loyal to your own country.
All these things can be true at the same time.
1)McDonald Douglas takeover of Boeing got rid of Engineering in favor of GE style financial engineering (see where that got GE)
2) Total failure of vision and execution, granted #1 ensured that goals were not aligned within the company
3) Share buybacks traded long term stability for short term gain (and CEO windfalls)
4) Union goals of returning to DB pension scheme is nuts
Tim Clark is simply realizing – like Scott Kirby before – that Boeing’s inability to deliver the planes those two airlines agreed to produce for EK and UA won’t come and those airline’s growth plans are on the ropes.
Kirby managed to get in on the A321NEO before the MAX 10 complete meltdown so Kirby will get some large narrowbodies but Clark will not get a replacement for the 777X – which is a replacement and downsize from the A380 unless Boeing builds it or Clark humbles himself and admits the A350-1000 will work at EK as it has for Etihad and Qatar. Airbus simply does not need to deeply discount hundreds of copies of the 35K while it was huge discounts to the Middle East airlines that made the 777X possible.
And, Gene, never has a single US airline been bailed out by the government. US airlines have received federal help because of macroeconomic events that affected the industry – not because of mismanagement of the company. Multiple airlines have failed while others succeeded.
While there is only one large US commercial aircraft manufacturer, it will fail in C11 if that is what has to happen; but the US government will ensure that Boeing continues to exist even if by supporting other companies that pick up Boeing’s pieces. Wiping out $80 billion of Boeing market cap is not out of the question
@ Timmy — For real? You are full of it. US airlines were all bailed out during COVID. Those companies could have borrowed and/or filed bankruptcy, but it was easier to just stick out their hands and screw over the taxpayers, their employees and customers.
@Tim Dunn.
Yet LH payed back its bailout from Covid relief. And the three big automakers paid back the Govt. after the financial crisis. Neither of which were their faults. BS…they got a free ride and we are all paying the price now.
So, the lead comment in this thread has ruffled some feathers. Now, ordinarily I might scoff at the idea of “greed” being at fault for some corporate failing, in this case I think it’s very true and correct. Boeing was taken over by the McDonnel Douglas guys, who were preconditioned to be more interested in the *short term* bottom line than anything else. This practice was placed on steroids when these sharks took over Boeing in spite of the latter supposedly buying their company.
Prioritization on “shareholder value” above literally all else leads to degraded product and a toxic workplace. It’s the mentality of the closed-minded a-hole. If you prioritize excellence, you’ll do better. Boeing has failed to do this for a couple decades now and they’re reaping the rewards. In the distant past, Boeing would have ended up bankrupt and out of business as many of their competitors did. However, with a near monopoly in their home market – they’ll probably thwart Darwin and survive.
By the way, I’m not one who blames corporations for every ill that befalls society. Unlike the politician who blames rampant inflation on “corporations conducting price gouging”, I happen to understand that piss poor economic polities caused this and blaming corporations should be laughable, but it does reel in the stupid among us. All that daid, Boeing is a case of greed indeed and they should be allowed to rot, but they won’t be. Not sure how any airline will trust them enough to make meaningful aircraft purchases from them, but I suppose the lack of competition requires it.
“When people say I changed the culture of Boeing, that was the intent, so that it’s run like a business rather than a great engineering firm” – Harry Stonecypher – formerCEO of McDonnell-Douglas before he took over Boeing…and ruined it!” … ‘nuf said!
When Boeing’s Board, full of the Deep State Cronies Orange Cheetoh has a point about, decided to take the MONEY TO BUILD THE NEXT GEN aircraft? And, instead to buyback stock to prop up Black Rock and the institutions? Ahd their own comp packages?
That’s when you know BA is completely buggered. Just take a look at the board through the last 15 years… all suckerfish like Nikki Haley…. willing to waste the money on the wrong thing.
@Mantis
You are so clueless of basic finance and governance that it’s breath-taking.
Take a look at how much money went off the balance sheet to prop up share price and over-pay board and executive comp.
Boeing was “the golden goose” and everybody in the C-Suite choked that big boy to death. Now the goose is about to flatline and you have the gall to blame the unions that lost their pensions while the execs were buying back stock? GTFO.
The basic labor costs associated with the machinists is low single digits of COGS.
A 20% bump there is nothing. Boeing’s really, really showing how bad they are at running their own business.
Gene and Antwerp,
ALL US airlines were afforded the same benefits – and they were in line with what was given other industries.
Airlines were paid to keep people on the payroll that they would have laid off.
The notion that US airlines got something that the rest of America didn’t get is devoid of reality.
As Gary has accurately noted, some airlines did, in fact, lay off people when they were no longer being paid to keep them on the payroll.
Support for the airline industry was vote buying for heavily unionized companies from both parties cloaked in keeping Americans on the job – but ultimately the number of employed Americans inside and outside the airline industry was much higher than it would have otherwise been. and airlines got a small fraction of the total amount of money that was thrown into the US economy. including to people here who are Americans and have ACH deposits in their account from the US Treasury.