Boeing says it will be ready to fund new plane programme by 2030

{"text":[[{"start":9.9,"text":"Boeing expects to have the financial firepower to launch a programme to replace its bestselling 737 Max by the end of the decade, chief executive Kelly Ortberg said, even as he warned that airlines were more focused on fixing problems in existing fleets than pressing for a new aircraft."}],[{"start":27.700000000000003,"text":"Ortberg said the US group was getting its “financial house in order”, which would take “another couple of years”, and would have more resources to devote to a next-generation aircraft once it secures certification for the final 737 Max variants and the delayed long-range 777X."}],[{"start":44.95,"text":"Speaking on the eve of the Farnborough Airshow, he said Boeing was “spending time and money preparing ourselves to be ready when the market’s ready”, adding: “I don’t see that our readiness is . . . a constraint”."}],[{"start":57.1,"text":"Ortberg’s comments are the clearest indication yet that the aerospace and defence group is readying itself to launch a new aircraft to take on arch-rival Airbus in the lucrative narrow-body segment of the market. "}],[{"start":69.25,"text":"The European planemaker has said it plans to launch a new narrow-body programme in 2030, with the aim of having a successor for its best-selling A321 family of jets in service in the second half of the next decade. "}],[{"start":82.5,"text":"Launching a new model would cost billions of dollars. Ortberg, who took the helm at Boeing almost two years ago with a mandate to rehabilitate the company after a series of safety and manufacturing crises, has made financial stability one of its priorities before launching a new model."}],[{"start":100.15,"text":"Boeing, which reports second-quarter earnings this month, has said it expects to be cash flow positive in the second half of the year as it continues to expand output of the 737 Max. "}],[{"start":111.25,"text":"Ortberg declined to comment on Boeing’s financials ahead of earnings but said the company would have “more resources available” for a next-generation programme once it secures certification for the latest two 737 Max models as well as the delayed long-range, wide-body 777X. "}],[{"start":129.1,"text":"Bringing the new models to market is key to generating cash for the group and repairing its balance sheet."}],[{"start":135.2,"text":"Boeing is in the latter stages of securing certification from regulators for the 737 Max 7, the smallest of the Max models, while the largest, the 737 Max 10, is expected to be certified by the end of the year. It is also still forecasting deliveries of the 777-9, which is in the midst of flight testing and seven years behind the company’s original schedule, to start next year."}],[{"start":null,"text":"

"}],[{"start":159.79999999999998,"text":"“We’ve had a lot of resources applied to those programmes and finishing those up will allow us to transfer resources on to the new aeroplane development work,” said Ortberg. "}],[{"start":168.79999999999998,"text":"The industry veteran, who came out of retirement to take on the Boeing job, last year identified three things that needed to fall into place before the company could launch a new plane: financial stability, market demand and technology. Despite progress on Boeing’s recovery, Ortberg said the market was probably “less ready today than it was a year ago”. "}],[{"start":189.35,"text":"Airlines, he added, were focused on ensuring that today’s line-up of planes was performing. Carriers have become increasingly frustrated over the durability of aircraft and some of the newest engines, which have led to costly repairs and a shortage of spares, forcing some to ground aircraft."}],[{"start":207.6,"text":"“I’m not going to jump to something new until we’re sure that we’ve got a mature technology,” said Ortberg. "}],[{"start":213.7,"text":"The CEO refused to be drawn on what a new plane might look like. However, its current “baseline” scenario was focused on using a traditional, enclosed engine rather than the more radical “open fan” engine developed by CFM International that Airbus is testing."}],[{"start":229.79999999999998,"text":"Ortberg said he was more focused on ensuring Boeing was ready than “the exact timing of the competitor”. "}],[{"start":236.45,"text":"“This is a long play . . . so whether they start one year or we start one year, I don’t think it’s as important as making sure that we’ve got the right aeroplane for the customer.”"}],[{"start":245.14999999999998,"text":"The company, he added, still had “more work yet to do” to regain the trust of stakeholders but he said he was “pretty pleased” with its progress. "}],[{"start":254.45,"text":"Ortberg pointed to last week’s decision by the US aviation regulator to allow Boeing to issue its own airworthiness certificates for all 737 Max and wide-body 787s — the first time it will be trusted to do so since 2019, after the second fatal crash of a 737 Max. "}],[{"start":275.25,"text":"Ortberg said the company’s immediate focus was on delivering on its backlog of orders. The company delivered 171 aircraft in the second quarter, up 12 per cent on the previous year. It also received 121 gross orders in June, compared with 116 a year earlier. "}],[{"start":295.2,"text":"“Orders are not our challenge,” he said. “Our challenge is getting these orders delivered”."}],[{"start":300.59999999999997,"text":"Boeing this month officially opened a new production line for its flagship narrow-body 737 Max programme that is critical for Ortberg’s hopes of increasing 737 production from 42 jets a month to 52 and beyond."}],[{"start":315.45,"text":"Ken Herbert, an analyst at RBC, stressed that with a backlog of almost 7,000 unfulfilled orders, “the primary focus for investors will remain on the state of the supply chain and delivery schedules”."}],[{"start":null,"text":""}],[{"start":327.84999999999997,"text":"Ortberg acknowledged that Boeing, which is also one of the world’s biggest defence companies, would have to align with the changing defence climate in Europe, where governments have put more emphasis on bolstering indigenous capabilities. "}],[{"start":340.99999999999994,"text":"The company, he said, would “probably move from selling directly to selling through partnerships and aligning with in-country suppliers”, including potentially setting up co-production facilities. "}],[{"start":352.1499999999999,"text":"The company has teamed up with Britain’s BAE Systems and Sweden’s Saab to mount a joint bid for the Royal Air Force’s next fast-trainer jet. It also has a joint venture with Germany’s Rheinmetall to offer the MQ-28 Ghost Bat uncrewed combat aircraft to the German Bundeswehr. "}],[{"start":367.99999999999994,"text":"Asked about Boeing’s relationship with President Donald Trump, who has used plane orders as leverage in trade deals and called himself the greatest salesman in the history of the group, Ortberg said “he’s been very helpful to the industry . . .  He is an aeroplane fanatic. He knows a lot about aeroplanes.”"}],[{"start":393.69999999999993,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1784518990_8040.mp3"}