American Aviation: Boeing's Financial Troubles
Written by Kathan Desai
We all have turned on the news or our favorite social media app to hear about the harrowing incident of a plane crash. Yet even though these terrorizing incidents happen, few of us may recall the specific aircraft that carried us to our latest destination. Was it a Boeing? Airbus? Embraer? While many of these aircraft manufacturers hail from foreign countries, Boeing has historically shined as a beacon of pride for American aviation.
However, beneath the surface lies a troubling reality. With its eyes set on rapid industrialization, Boeing has prioritized profits at the expense of its customers.
With an increasing number of safety breaches in Boeing, it’s important to ask the question: what exactly is happening?
Boeing’s History:
The root cause of Boeing’s troubles began as a tale of clever business tactics in exchange for customer loyalty. In 2019, to compete with one of the world’s largest aircraft manufacturing companies, Airbus, Boeing quickly released their 737 Max models. However, the rush to compete in the global market only led to drastic consequences: plane crashes, staffing shortages, and steep reputational damage.
The Harvard Business Review pinpoints poor leadership dating back to 2003 as the reasoning behind Boeing’s financial collapse. As such, the sinking supply of Boeing’s planes only created greater market opportunity, which Airbus, an aerospace organization focused on sustainability, seized for the taking.
Airbus Enters the Scene:
In 2023, Airbus boasted a backlog of 8,598 jets, marking a record in aircraft demand. This golden market opportunity created by Boeing has allowed Airbus to secure the highest gross orders of planes in a single year, an impressive tally of 2,319 jets ordered in 2023 alone. Airbus set its plans to win over Boeing’s customers by filling the gap in Boeing’s 737 deficit.
As a result of its widespread success, Airbus has promised to pay shareholders a special dividend on top of the regular dividend in 2024. Since the company’s most recent earnings report, Airbus revenues have skyrocketed by 14% to 10.7 billion euros. As the gap widens between Boeing and Airbus, it still remains unclear how Boeing will rebound.
The primary concern with Boeing’s downfall aligns with the United States’ national security. As the US relies heavily on Boeing for many military planes, a financial loss for the company can lead to some severe results. Debates around the nationalization of the company have arisen and even that idea seems hopeful for a company failing this badly in the status quo.
Concluding Thoughts
It is difficult to understand how Boeing will recoup their profits especially since innovation has been incredibly slow. It all starts with Boeing rebuilding its ties with its primary customers. Will the wings of the 737 fly again?
Kathan Desai is a student based near Philadelphia, PA interested in aeronautical engineering and political science. He enjoys planespotting, playing chess, and competing in debate tournaments across the country.
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