By Dan Catchpole and Shivansh Tiwary
(Reuters) -Boeing pushed the first delivery of its long-delayed 777X jet program out to 2027 and took a nearly $5 billion charge due to the delays, in another series of setbacks for the aerospace giant.
The 777X was central to Boeing’s long-term widebody strategy, previously dominated by its iconic 747 and 777 jets. But repeated certification and production delays have pushed back deliveries by years, piling up charges of over $15 billion and straining its finances, while giving an opening to rival Airbus’s competing A350 as international travel continues to surge.
Last month, CEO Kelly Ortberg said the company was behind schedule in certifying the jet, saying a “mountain of work” needed to be done but did not mention further delay to first delivery, which was slated for 2026, at the time.
He said, however, no new technical problems had been identified.
Including charges disclosed on Wednesday, Boeing has taken about $15 billion in charges related to the 777X program. The latest charge includes penalties owed to customers for late deliveries.
Shares of the planemaker were down 1% in premarket trading. Wall Street analysts had anticipated a sizeable charge to the 777X program.
Richard Aboulafia, managing director of AeroDynamic Advisory, a U.S. boutique aerospace management consulting firm, said the charge was more than the $2 billion to $4 billion he expected. While he does not expect the charge to be financially crippling to debt-laden Boeing, “it does raise questions about any more surprises to come.”
However, the latest delay comes at a time when demand is growing for international travel driving demand for the widebody aircraft, which was not the case when the 777X was first held up.
“Now it might be getting to a challenge,” Aboulafia said. “People start to lose patience and demand compensation.”
The charge includes longer production costs and penalties owed to customers, according to Boeing.
YEARS OF QUALITY ISSUES, DELAYS
After years of grappling with quality issues and production delays on its flagship 737 MAX, Boeing cautiously ramped up monthly output in 2025.
Earlier this month, the company received the long-awaited approval from the U.S. Federal Aviation Administration to increase 737 MAX production to 42 jets per month, easing a cap of 38 that had been in place since January 2024.
That cap was imposed following a mid-air panel blowout in January 2024 on a nearly new aircraft.
Boeing delivered 55 jets in September, marking its strongest performance for that month since 2018. This was a significant jump from the 33 deliveries recorded a year earlier, when a strike involving 33,000 factory workers in the Pacific Northwest disrupted production.
Deliveries are closely watched by Wall Street, as planemakers typically receive the bulk of their payments upon handing over the jets to customers, making deliveries a key indicator of revenue and cash flow.
Boeing reported a free cash flow of $238 million, turning positive for the first time since 2023.
The planemaker posted an adjusted loss per share of $7.47 for the quarter through September, compared with analysts’ average expectations of a $4.59 loss, according to data compiled by LSEG.
Its revenues for the quarter rose 30% to $23.27 billion, above Wall Street expectations of $21.97 billion.
(Reporting by Shivansh Tiwary in Bengaluru and Dan Catchpole in Seattle; Editing by Sriraj Kalluvila and Nick Zieminski)
Comments