AMERICA's major plane maker boeing predicted a massive cash drain for the first quarter as regulatory scrutiny and slower output of its 737 Max jetliner after its mid-air accident took its toll on company finances, reports Bloomberg.
Cash outflow will reach US$4 billion to $4.5 billion in the first quarter, Boeing chief financial officer Brian West told a Bank of America conference in London.
A plan to reach a $10 billion cash flow target by 2025-26 will be at the far end of that window. For the year, free cash flow will be in the single digit billions of dollars, Mr West said.
'We're not at the moment where we can manage the near term for these financial outcomes because of the work at hand around stability,' he said. 'Our expectation is that we'll get more predictable and better positioned, but it will take time.'
Mr West said margins at the commercial aircraft business will be negative to the tune of about 20 per cent in the first quarter as the company pays out compensation for a near-catastrophic fuselage failure on a Boeing 737 Max 9 aircraft on January 5 and absorbs the broader hit from the episode. While margins will improve for the year, they will remain negative for 2024, the CFO said.
As part of the fallout from the January 5 episode, regulators have capped Boeing's output to make sure the company has the resources to review its manufacturing processes.
He said production rates will be lower in the first half and the rise again in the latter part of the year toward thirty-eight 737 Max units a month. Anything beyond that 'will be up to the F,' he said of the Federal Aviation Administration.
Ryanair said that summer capacity in Europe will be held back by Boeing's delivery delays and separate engine issues afflicting Airbus SE aircraft.
The Irish budget carrier flies an all-Boeing fleet and has been forced to scale back some targets and destinations for this summer because it's not getting the number of planes it had planned for.
SeaNews Turkey
Cash outflow will reach US$4 billion to $4.5 billion in the first quarter, Boeing chief financial officer Brian West told a Bank of America conference in London.
A plan to reach a $10 billion cash flow target by 2025-26 will be at the far end of that window. For the year, free cash flow will be in the single digit billions of dollars, Mr West said.
'We're not at the moment where we can manage the near term for these financial outcomes because of the work at hand around stability,' he said. 'Our expectation is that we'll get more predictable and better positioned, but it will take time.'
Mr West said margins at the commercial aircraft business will be negative to the tune of about 20 per cent in the first quarter as the company pays out compensation for a near-catastrophic fuselage failure on a Boeing 737 Max 9 aircraft on January 5 and absorbs the broader hit from the episode. While margins will improve for the year, they will remain negative for 2024, the CFO said.
As part of the fallout from the January 5 episode, regulators have capped Boeing's output to make sure the company has the resources to review its manufacturing processes.
He said production rates will be lower in the first half and the rise again in the latter part of the year toward thirty-eight 737 Max units a month. Anything beyond that 'will be up to the F,' he said of the Federal Aviation Administration.
Ryanair said that summer capacity in Europe will be held back by Boeing's delivery delays and separate engine issues afflicting Airbus SE aircraft.
The Irish budget carrier flies an all-Boeing fleet and has been forced to scale back some targets and destinations for this summer because it's not getting the number of planes it had planned for.
SeaNews Turkey
