Boeing taxies cautiously for takeoff with fighter support

Boeing reported its best second quarter results since 2023. Net loss narrowed by 58%, which is better than the consensus forecast, but more important than the reduction in losses is the production rate of the key 737 MAX model. Technically Boeing could ramp it up from 38 to 42 units per month, but it doesn't want to do so, which is much to the liking of regulators in the U.S.  

The comparison of financial performance with 2023 is not accidental. Back then, Boeingrecorded a net loss of $2.2 billion (on revenue of $77.7 billion). It was the largest financial loss since the COVID-19 pandemic.  The problems went deeper: defects on assembly lines, supplier errors and reputational losses after the 737 Max crashes in 2018 and 2019, when 346 people died. Operations of the flagship airliners were suspended for 20 months. In July 2025, Boeing agreed to plead guilty to fraudulent conspiracy charges stemming from the 737 Max crashes.

The year before, Boeing was in the news with another high-profile accident. In January 2024, an Alaska Airlines airliner snapped a panel covering an emergency exit during an altitude gain. At an altitude of about 4,600 meters the cabin depressurized, no one was injured, but passengers' belongings were thrown out of the cabin. The incident prompted an emergency inspection of the entire 737 MAX 9 line, again with a temporary suspension of their operation. The investigation revealed that the cause was poor panel attachment during assembly at the Renton plant. Following an investigation into the incident, the U.S. National Transportation Safety Board (NTSB) and the U.S. Federal Aviation Administration (FAA) declared serious deficiencies on Boeing's assembly lines, as well as systemic errors in the internal quality control process.

The company's board of directors decided that a crisis manager should be sought quickly. On August 8, 2024, Kelly Ortberg was named CEO of Boeing, succeeding Dave Callouin, who had led the company since 2020. The appointment came amid news of a loss of $1.4 billion in the second quarter of 2024.

Investment firm Jefferies called Ortberg "a strong executive with a deep understanding of commercial and defense aviation." Analyst firm Vertical Research Partners cited his experience and reputation for building a healthy corporate culture as key qualities for Boeing's recovery. Melius Researchemphasized that his status as an "outside man" gives the company a chance to address the backlog of problems.

Ortberg declared after his appointment that he liked the strategy of "gradual growth without compromising on quality". And he's been true to it to this day. The company could increase 737 MAX assembly to 42 airplanes a month, but Boeing's CEO believes the time for acceleration is not yet ripe;

In his first year at the helm of Boeing, Ortberg focused on reorganizing manufacturing processes and rebuilding a quality culture. For starters, he decided to move operational leadership to a Seattle office closer to the assembly lines. Under his leadership, he launched a comprehensive Safety & Quality Plan to eliminate defects and errors at all stages of production;

You could say that the plan was written for the FAA as a demonstration of Boeing's willingness to work on mistakes. Under Ortberg, the company eliminated so-called "shadow-factories" (shadow-factories). These are separate production sites where airplanes with defects or awaiting deliveries of missing components were moved;

In addition, Ortberg settled a dispute with employees by halting a 7-week staff strike in 2024. Boeing's employee union (IAM) demanded a 38% wage increase and participation in assembly line quality control. Workers complained of tool shortages, constant production glitches, and overtime that reached up to 60 hours a week at some assembly stations.

The head of Boeing used employee demands in favor of a quality improvement plan. The union and the CEO agreed on a new collective bargaining agreement that was one of the most significant for the industry. The contract called for a 38% wage increase over four years. In addition, the union gained an increase in the number of supervisors at the company's assembly plants.

Ortberg's strategy - "growth without compromise on quality" - has worked. The company's May 2025 report shows that defects in the assembly of the 737 MAX reduced by about 30 percent from the previous year.

According to financial indicators, Boeing under Ortberg's leadership began to gradually come out of the crisis. The airplane manufacturer's revenue for the first half of 2025 increased by 26% to $42.2 billion. Net loss almost tripled from $1.79 billion in the first half of 2024 to $643 million in the first six months of 2025. The company returned to delivery volumes comparable to pre-crisis levels: in the first six months of 2025, 280 aircraft were delivered to customers, including 206 737 MAXs, the best performance since 2018.

A major achievement as CEO for Ortberg was a contract with the U.S. Air Force to develop and produce the new-generation F-47 fighter worth more than $20 billion.  The company's stock then rose 5%. The deal (delivery of up to 185 fighter jets, with the first ones taking place by 2029) balances the company's civilian order book, which has surpassed 6,000 aircraft by the end of 2025. 

Here, however, he has yet to clean up production. 3,200 employees in two states, led by the St. Louis union, went on strike on August 3. The workers have yet to accept a wage increase offer from $75,000 to $102,600 

There hasn't been a strike at Boeing's defense division since 1996. It is much smaller than the civilian one; the union in St. Louis is one-tenth the size of the one in Seattle;

"I wouldn't worry too much about the impact of the strike. We'll deal with it," announced Kelly Ortberg.

This article was AI-translated and verified by a human editor