The cash flow drag from 11 newly built but undelivered 777 freighters would translate to roughly US$1.16bil, an analyst said. — Bloomberg
NEW YORK: Boeing Co likely didn’t deliver any 777 freighters during the first quarter, adding to its cash woes at a time when 737 Max handovers are sluggish amid heightened government scrutiny.
The planemaker, as of last week, had 11 newly built “gliders”, an industry term for finished aircraft that are lacking engines, stashed in and around its factory in Everett, Washington, Jefferies analyst Sheila Kahyaoglu said in an April 5 report citing data from Aero Analysis Partners/AIR.
The cash flow drag from 11 newly built but undelivered 777 freighters would translate to roughly US$1.16bil, according to George Ferguson, an analyst with Bloomberg Intelligence.
He estimates that each aircraft not delivered represents a cash outflow of about US$105mil. Boeing’s cash use is a growing concern for investors after the planemaker said last month that it expects to burn through US$4bil or more during the first quarter.
The bottleneck highlights how Boeing’s manufacturing challenges extend beyond its cash-cow 737 Max jet.
The aerospace giant is working to bring its factories and supply chain back to a steady cadence under scrutiny from US regulators following a series of quality and safety lapses.
Boeing and the 777 freighter’s engine manufacturer, General Electric Co (GE), declined to discuss specific details around the delivery hiccup.
“As the aviation industry continues to manage through supply chain constraints, we are working closely with our suppliers and customers on the timing of their deliveries,” Boeing said.
Like Boeing and Airbus SE, jet-engine manufacturers are also grappling with labour turnover and parts shortages that have persisted since the pandemic eased.
GE executives in early March said about 80% of its delivery shortfalls were tied to constraints at suppliers.
Six Boeing 777 freighters were built in March but not delivered, Kahyaoglu said, after the American planemaker handed over none to customers during the first two months of this year. — Bloomberg
