Boeing CEO says 2 more years needed before new jet launch

Boeing Co. needs at least two more years to repair its finances before it can launch a new airplane design, Chief Executive Officer Kelly Ortberg said at the Farnborough Airshow on Monday, as the planemaker focuses on stabilizing production and paying down debt.

"We've got to get the company on solid financial footing first," Ortberg said in an interview. "We need a couple more years to shore up the balance sheet before we can commit to a new jet program."

The comments underscore the challenges facing Boeing as it works to restore confidence after a series of production and safety crises. The company has been burning cash as it slows output to address quality-control issues, and its debt load has swelled to about $45 billion. Ortberg said the priority is ramping up production of the 737 Max and 787 Dreamliner to generate cash flow.

Boeing's production rates remain well below pre-pandemic levels. The company is targeting a 737 Max output of 38 planes per month by year-end, still far from the 52 per month it achieved in 2019 before the Max grounding. The 787 program is running at about five planes per month, with plans to reach 10.

Ortberg also addressed the Air Force One program, calling it "the most complex twin-aisle plane we've ever built." The presidential aircraft program has been a source of financial strain, with Boeing taking billions in charges on the fixed-price contract.

On the technology front, Ortberg said Boeing is exploring the use of artificial intelligence and robotics in aircraft manufacturing to improve quality and efficiency. The company is testing automated drilling and inspection systems at its assembly plants, though he cautioned that widespread deployment remains years away.

The aerospace industry is grappling with a supply-chain bottleneck that has constrained output across the sector. Boeing's main rival, Airbus SE, has also struggled to meet delivery targets, underscoring the broader manufacturing challenges facing the industry.

The decision to delay a new airplane program means Boeing will cede ground to competitors in the next-generation narrowbody market. Airbus has said it is evaluating options for a new single-aisle plane, though it has not committed to a timeline.

For Boeing investors, the extended timeline means continued pressure on margins and free cash flow. The company's next major catalyst will be its third-quarter earnings report in October, when Ortberg is expected to provide updated production targets and cash-flow guidance.

This article is for informational purposes only and does not constitute investment advice.