32 billion dollars in losses why Boeing survives!
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Photo: Collected
The situation seems to be in no way favorable to the world-famous aircraft manufacturer Boeing. One accident after another has left the grinding company in a poor financial condition as well as its image.
Boeing has to face huge financial losses after one accident. Statistics show that the company has made a loss of USD 32 billion in the last 5 years.
Analysts said that if any company other than Boeing suffered these losses, the company would have gone bankrupt. It still survives because of Boeing.
Sources said that despite these losses, Boeing's 5,600 aircraft were unable to deliver commercial aircraft worth 529 billion USD. Now the question is why Boeing has reduced the production of aircraft despite having such a large number of aircraft orders. Where is the problem then? While searching, it was found that they have reduced this number to ensure the quality of the aircraft. They are not just looking at building airplanes for profit.
US aerospace expert Ron Epstein said this situation cannot last forever because they have little deviation. But that's why they don't want to get into trouble again tomorrow.
Debt-ridden Boeing:
Boeing management said they are focusing more on safety and quality than profits. For example, the nut bolt may not be there - I am careful about all such things. Because if such a nut bolt is not there then the structure of the aircraft can open in the sky as was the case with the Alaska Airlines Boeing 737 last January.
Boeing's recently departed CEO Dave Calhoun said Boeing's finances are not as bad as they seem. Rather, it is important for us to understand how optimistic our employees and stakeholders are about Boeing's future. Rather, we also have incredibly strong selection across the portfolio. We also have world class staff. We also have a lot of work ahead of us. But we are proud of our staff and have full confidence in our future.
That doesn't mean Boeing isn't serious about its problems. Quality and safety issues have eroded air traveler’s confidence. Moreover, Boeing's orders fell both before and after the Alaska Airlines incident because Boeing has fallen far behind rival Airbus.
In 2018, 346 passengers were killed in the crash of Indonesia's Lion Air and Ethiopian Airlines in 2019. The worst-selling Boeing 737 Max crash in the second quarter of 2019 grounded the best-selling airliner for 20 months. Boeing's debt rose from 13 billion dollars to 48 billion dollars at the end of 2018 following the Max 737 crash.
Where Boeing is ahead:
The Boeing Company has two advantages that other companies do not have. First, even if all of the company's customers decide to switch from Boeing to Airbus, Airbus has more than 8,000 commercial jet orders and is targeting to deliver about 800 planes this year. That means airlines that have ordered Boeing are unlikely to cancel. If a new aircraft manufacturer wants to enter this business, it will take years and billions of dollars of investment to come up with a competitive model of aircraft.
Airline pilots are certified to fly only a specific model of aircraft. They cannot switch to a competing model aircraft at will. Airlines also need to maintain a supply of spare parts to ensure the serviceability of their own aircraft. So once an airline chooses a 737 Max aircraft, it's too expensive to switch to a rival model.
But there is another side. Airbus' lead could become permanent if Boeing doesn't fix its problems quickly. So Boeing may be in trouble in the long run.
