Boeing will lose nearly $8 billion in 2021: 737 deliveries increased sixfold, and 787 fell more than 70 percent

Reporter | Xue Bingbing

On January 26, local time, Boeing (NYSE code: BA) released its 2021 annual financial report, with annual revenue of $62.3 billion, an increase of 7% year-on-year; a net loss of $4.29 billion, compared with a loss of $11.941 billion over the same period last year, achieving a significant loss reduction.

In 2021, Boeing delivered a total of 340 commercial aircraft, an increase of 183 aircraft over the previous year, an increase of 117%, mainly due to the climb in 737 series aircraft deliveries, about 6 times that of the same period in 2020. However, the delivery of 787 aircraft has declined visibly, with 14 deliveries in 2021, only 26.4% of the delivery volume in 2020.

Image source: Boeing earnings report

In terms of new orders, Boeing received a total of 909 new orders in 2021, and after deducting cancellations, conversion orders and accounting adjustments, the net order was 535, almost double that of 2020.

Against the backdrop of rising deliveries, Boeing Commercial Aircraft deliveries generated $19.493 billion in revenue in 2021, up 21 percent from 2020. Specifically, in the fourth quarter, commercial aircraft deliveries achieved revenue of $4.75 billion.

David Calhoun, President and CEO of Boeing, said: "2021 was a year of rebuilding for us, with we increasing 737 MAX production and delivery. We also received strong commercial orders, including record cargo aircraft sales, as the recovery in the commercial market was driving, indicating good progress in our overall recovery. ”

Over the past year, Boeing has continued to push the 737MAX back to flight worldwide. According to Boeing, since the FAA approved the resumption of operations of the 737MAX in November 2020, the model has completed more than 300,000 commercial flights, and the 737MAX fleet remains above 99% reliable (as of January 24, 2022).

The 737MAX also has a timetable for resuming flights in China's civil aviation market. In December 2021, the Civil Aviation Administration of China issued an airworthiness directive clarifying the corrective work that domestic airlines need to carry out on the 737MAX, and it is expected to resume commercial operation of the existing fleet and restart the introduction of new aircraft in early 2022.

Boeing currently plans to produce the 737 series at a rate of 26 aircraft per month and strive to reach a production rate of 31 per month in early 2022, and the company is still evaluating the timing of production acceleration.

On the other hand, because the manufacturing defects of the 787 were not fully resolved, Boeing continued to rework the 787 aircraft in stock, while also discussing in detail with the FAA how to take further action to resume delivery.

In the fourth quarter, Boeing has made it clear that it will slow down the production plan of the 787 passenger aircraft again. The financial report pointed out that this low-speed production plan will continue until the delivery work is resumed. Over time, the 787 is expected to gradually return to production speeds of five per month.

Boeing suffered a lot of losses due to the slowdown in production and delivery delays in the 787 aircraft, and the abnormal cost of the 787 aircraft is expected to increase to about $2 billion, most of which occurred at the end of 2023, and the abnormal cost recorded in the quarter was $285 million.

It is worth mentioning that Boeing recovered positive cash flow in the fourth quarter. The data shows that operating cash flow in the fourth quarter was $716 million, and net cash flow was still $494 million after deducting assets such as real estate, plants and equipment, which is also the first time since the beginning of 2019 to return to positive cash flow.

However, for the full year 2021, Boeing's operating cash flow has still not been able to turn positive, with a net cash flow of -$4.396 billion.