Boeing (NYSE: BA) It faces ongoing challenges in 2025. However, it also has opportunities to execute on its existing backlog in its aerospace and defense businesses.
Despite the company’s difficulties, it closed the year with a large order from Pegasus Airlines confirming the underlying demand for Boeing aircraft. To maximize returns for investors, Boeing needs to execute better starting in 2025.
In this context, here are three things investors should pay attention to from the company in 2025.
Turkey-based Pegasus Airlines’ firm order for 100 Boeing 737 MAX aircraft, with an option to order 100 more, highlights the strength of Boeing’s continued demand and backlog. As of the end of November, Boeing’s total commercial aircraft backlog was 6,268, including 4,818 737 MAX aircraft.
To put that number in context, Boeing planned earlier this year to reach a steady rate of 38 monthly deliveries of the Boeing 737 MAX by the end of the year. This equates to 456 aircraft per year, a rate that indicates a 10-year backlog of 737 MAX aircraft.
In 2025, Boeing will undoubtedly want to prioritize boosting 737 MAX production. Unfortunately, a range of self-imposed measures have been taken to slow down production and improve manufacturing quality in light of the crisis Alaska Airlines Blowout in early 2024 Industrial action means Boeing’s delivery rate is disappointing in 2024.
The first step to recovery is reaching the initial target of 38 737 MAX deliveries per month.
It won’t be easy. After all, Boeing will need to make sure its suppliers match its delivery rates, not least because the 38-per-month rate is the beginning of ramping up. Fuselage supplier Air spirit systemsa company that Boeing intends to acquire in 2025, is facing financial difficulties, and CFM International, the company General Electric Aerospace Joint venture supplies 7373 Max engines, It missed the engine production target In 2024 amid ongoing supply chain difficulties.
As such, achieving the initial target would be a big positive for the stock, and investors should look for commentary on this matter.
The following chart illustrates the difficulties faced by Boeing’s Defense, Space and Security (BDS) segment.
Former BDS CEO Ted Colbert left the company in September, after Kelly Ortberg was named Boeing CEO in the summer. The sector’s problems stem from cost pressures and overruns in a range of fixed-price development programmes, including the KC-46 tanker and a refueling aircraft; the MQ-25, an aerial refueling drone; VC-25B, commonly known as Air Force One; And the T-7 training aircraft. This represents about 15% of its revenues. It has also faced cost issues with its fighter and satellite programs, which account for 25% of its revenue.
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