Boeing has experienced yet another major blow as they recently announced the delay of their 777X aircraft into 2027. However, this one-year delay brings with it some major financial consequences, as the company is expected to owe $5 billion in penalties for delayed deliveries. Yet the news underscores just how far the aerospace giant continues to struggle. It has continued to fight through regulatory battles, a restive workforce, and hangover safety issues.
This delay of the 777X aircraft is no isolated incident. Boeing’s been here before with significant delays, which have to date added up to almost $15 billion in charges so far. These challenges aren’t getting better for Boeing. In August, more than 3,000 of its U.S. defense division workers went on strike, and last year, roughly 30,000 passenger aircraft employees joined in one of the largest walkouts of the year. These labor disputes were especially animated by red-hot grievances centering around pay and working conditions.
Kelly Ortberg, Boeing’s chief executive, said he was disappointed by the decision to push back the 777X schedule. He noted that the aircraft performed incredibly well during flight testing. Yet, the firm still has to go through the mounting regulatory gauntlet that has already caused much of its 11 months of delay.
“We are working to restore trust with all of our stakeholders,” – Kelly Ortberg
Ortberg’s statements denote a larger campaign at Boeing to completely change the company’s corporate identity and focus on passenger safety before all else. The company has come under intense scrutiny over safety concerns for all three of its civilian aircraft in the past few years. This backlash has really fueled an incredible demand for change.
In light of these challenges, Ortberg stated that Boeing aims to “stabilize our operations to fully recover our company’s performance.” This pledge is a major step towards addressing those recent failures and putting the company on a better path. Rebuilding trust among the company’s core stakeholders, including customers, employees and investors, is another objective.
Boeing is obviously going through a very rough time right now. There’s good reason for the company to want to get the 777X back on track – it’s a centerpiece of their future product mix. The company’s repeated delays raised concerns about whether it could deliver on Trust’s promise to the market. They further question its long-term competitive advantage in the country’s biggest aerospace hub.