Boeing Soars Towards Profitability: Production Stabilizes After Years of Crisis
Boeing is poised to report its highest annual airplane deliveries since 2018, signaling a significant turnaround for the aerospace giant after a period marked by safety concerns, quality defects, and pandemic-related disruptions. The company is now aggressively planning to ramp up production, aiming to recapture its position as a leader in the global aviation market.
From Dysfunction to Progress
“It’s a long road back from a… shall we say, a rather dysfunctional culture, but they’re making big progress,” noted a managing director at AeroDynamic Advisory, an aerospace industry consulting firm. Boeing faced substantial setbacks in recent years, triggered by the two fatal crashes of its 737 Max aircraft in 2018 and 2019, followed by a midair door plug blowout in January 2024. These incidents forced the company to drastically scale back production. The Covid pandemic further complicated matters, disrupting airplane assembly at both Boeing and its competitor, Airbus, due to supply chain issues and a loss of skilled workers.
Leadership and a Renewed Focus on Quality
Under the leadership of CEO Kelly Ortberg, a veteran aerospace executive who assumed the role after the door plug incident, Boeing is prioritizing increased production of its key aircraft – the 737 Max and the 787 Dreamliners. This push towards higher output is expected to drive the manufacturer, the top U.S. exporter by value, back into profitability, a state it hasn’t experienced since 2018. Previously, leadership was largely focused on damage control and addressing the concerns of frustrated airline customers facing significant delivery delays.
The tone has shifted as Boeing demonstrates greater predictability and consistently increases production, with the approval of the Federal Aviation Administration (FAA). Demonstrating increased confidence, the FAA in September authorized Boeing to self-certify airworthiness for some of its 737s and 787s, a privilege previously restricted for years.
Manufacturing Overhaul and Strategic Acquisition
Boeing’s commercial aircraft business remains its largest, contributing approximately 46% of sales in the first nine months of last year. The company’s turnaround has been largely driven by improvements on the assembly floor. Ortberg’s administration has significantly reduced “traveled work”—tasks completed out of sequence—to minimize costly errors. Additional training programs have also been implemented.
An investigation by the National Transportation Safety Board (NTSB) in June identified inadequate training and management oversight as contributing factors to the January 2024 door plug blowout. In December, Boeing completed its acquisition of Spirit AeroSystems, a fuselage maker it had previously spun off two decades ago, gaining greater control over a critical part of its supply chain.
Delivery Numbers and Future Projections
Boeing delivered 537 aircraft in the first 11 months of last year, with Jefferies estimating 61 deliveries in December, including 44 of the popular 737 Max. Total deliveries for 2024 reached 348 aircraft, compared to 528 in 2023. While these numbers represent progress, they still fall short of the 806 airplanes delivered in 2018.
The FAA raised the monthly production cap on the 737 Max from 38 to 42 last October. CFO Jay Malave anticipates reaching this rate in early 2026, with further increases of five planes at a time potentially on the horizon. Deliveries in 2026 are expected to consist primarily of new production, rather than clearing out existing inventory. Boeing also anticipates producing around eight Dreamliners per month starting early this year.
Investor Confidence and Airline Demand
Investors are optimistic about Boeing’s future, with shares gaining 36% over the past 12 months, outpacing the S&P 500’s nearly 20% advance. “Boeing is definitely better and more stable,” stated the CEO of Southwest Airlines, an all-Boeing operator, in a December interview. The company is scheduled to reveal its 2026 production plans later this month, during its quarterly results report on January 27.
Despite the positive momentum, several aircraft, including the Boeing 777X, as well as the Max 7 and Max 10 variants, are still awaiting certification, impacting cash flow and increasing costs. Southwest Airlines, awaiting the delivery of the Max 7, does not expect to fly the aircraft before the first half of 2027.
Demand for both Boeing and Airbus aircraft remains strong, with orders expected to exceed supply for the next decade, according to an aerospace analyst at Bernstein. Alaska Airlines recently placed an order for 105 Boeing 737 Max 10 jets and options for five 787 Dreamliners, citing confidence in Boeing’s turnaround and ability to deliver quality aircraft on time.
Global air travel has rebounded strongly since the pandemic, with airplanes flying at nearly 84% capacity in November – the highest level on record, according to the International Air Transport Association. As one analyst wryly observed, “Until somebody comes up with a transporter, you know, [like] ‘Star Trek,’ where you sort of vaporize and show up someplace else, we’re going to be flying.” This enduring demand ensures continued growth in aircraft orders and replacements.
