Boeing's comeback is welcome news
Last updated 1/18/2023 at 11:22am
How about some encouraging news for our state? It even made the front page of the Wall Street Journal.
Although Boeing didn’t outsell or make more airplane deliveries than its rival, Airbus, in 2022, it made substantial gains after three years of costly setbacks. Some may exaggeratingly compare the company’s problems since the onset of the coronavirus to the “Boeing Bust” (1968-72) when Congress ended funding for the SST (Supersonic Transport).
That cancellation hit Seattle hard. It triggered double-digit unemployment rates which spiked to three times the national average in 1971. It also prompted a memorable billboard near Sea-Tac Airport which read: “Will the last person leaving Seattle turn out the lights.”
In the early 1970s, Boeing leaders rejuvenated the company by introducing the 747, 737 and converting its 707 into the military’s AWAC (Airborne Warning and Control System). Boeing’s 747 inaugurated the era of widebody passenger jets. However, in 2022 it ended its 54-year production run which included Air Force One. Meanwhile, over 15,000 Boeing 737s have been sold,
Currently, Boeing is banking on keeping the 737MAX and 787 in service and moving steadily to deliver its 777X, the world’s largest and most efficient twin-engine jet, in 2025. The 787 and 777X feature carbon-fiber technology developed by Boeing.
Boeing’s recent performance improvements are vital to the Pacific Northwest’s economy and its workers and suppliers. Even though Amazon employs the most people in our state, Boeing employs 57,000 people who constitute 40 percent of the company’s entire workforce. In total, Boeing’s commercial airplane division accounts for half of its book of business.
The Seattle area is also the aircraft assembly hub for Boeing’s newest sophisticated military aircraft such as the Navy P-8 submarine chaser and KC-46 refueler.
“It’s estimated Boeing infuses around $10 billion per year into the regional economy through employee wages, charity partnerships and through thousands of other northwest aerospace suppliers that produce airplane parts,” Boeing Vice President Bill McSherry reported last May.
This year much of Boeing’s attention is directed at reducing its inventory of completed aircraft. It has been weighed down by aircraft groundings which resulted in a huge number of parked 737MAX and 787s. At one time, there were 500 undelivered MAXs awaiting additional work and delivery.
In 2020, CNN Business pegged losses from the 737MAX at $20 billion. In October 2021, Simply Flying, an international one-stop hub for all the key stories on commercial aviation, reported fixes to the 787 Dreamliner are expected to run around $1 billion.
According to Seattle Times aerospace writer Dominic Gates, “the rework on the 787s to fix quality defects is even more laborious (than 737MAX), taking up to four or five months on each aircraft. About 100 jets built and undelivered remain to be reworked.”
The good news is Boeing is making headway even as COVID flares sporadically, inflation drives up costs, and supply chain problems persist.
While ramping up new aircraft production, Boeing whittled down the 737MAX storage pool by 150 in 2022; however, it still has 250 to go.
Boeing’s total jet deliveries in 2022 were 480, an average of 40 jets per month. That is a 40 percent increase over 2021, Gates added. “Boeing’s official backlog now stands at 4,578 jets, including 3,628 MAXs. The Airbus order backlog is currently 7,239 jets, including 6,073 from the A320neo family of airplanes.”
While Airbus tops sales and deliveries of single-aisle passenger jets, Boeing booked more orders in widebody and 777-8 freighters.
The good news is Boeing is resilient and appears heading for another unprecedented comeback. The great news would be Boeing back on top of annual worldwide commercial airplane sales and deliveries at the end of 2023.
Don C. Brunell is a business analyst, writer and columnist. He retired as president of the Association of Washington Business, the state’s oldest and largest business organization, and now lives in Vancouver. He can be contacted at theBrunells@msn.com.