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Jakarta –
In the last five years, Boeing suffered losses of more than US$ 32 billion or IDR 510.9 trillion (exchange rate IDR 15,968). The loss of money of this magnitude occurred due to several model accidents that occurred and Boeing’s strong focus on the quality of its aircraft.
It is worth noting that Boeing lags far behind rival Airbus in terms of sales for new jets. After the second fatal crash of a Boeing 737 Max on an Alaska Airlines plane, Boeing reported a core operating loss of US$ 31.9 billion (Rp. 509.4 trillion) with a net loss in the same period reaching US$ 27 billion (Rp. 431.1 trillion). ).
According to FactSet, no other company in the S&P has lost that much over the past five years. Uber and Carnival Corp only came close to the losses suffered by Boeing. These large losses resulted in the company’s debt level soaring from US$ 13 billion at the end of 2018 to US$ 48 billion now.
So, how can this company that produces full passenger jets not immediately go out of business?
Boeing (BA) has an order backlog of more than 5,600 commercial jets worth US$ 529 billion over a multi-year period. The reason why Boeing has experienced losses in the last five years is that Boeing cannot make enough planes a year to make a profit to overcome quality problems.
Additionally, Airbus has a backlog of more than 8,000 commercial jetliners, but is projected to deliver only about 800 of them this year. This makes airlines keep placing orders with Boeing. Even if customers could get their Airbus jets immediately, it would cost a Boeing customer a lot of money to operate existing Boeing jets and a fleet of Airbus aircraft at the same time.
Another advantage that Boeing has is that airline pilots can only fly planes according to their certification. They can’t switch between competing models. Airlines also have to maintain a supply of expensive spare parts to service the planes they own. After Alaska Air bought Virgin America in 2016, they quickly got rid of Airbus jets and became an all-Boeing airline.
“The reason we went single fleet is we have two types of aircraft doing the same mission in the Lower 48. It costs $75 million to $100 million a year to operate this dual fleet between pilot training and backup and maintenance and spare parts and all that stuff, ” CEO Ben Minicucci said in January, speaking to investors.
Despite the many advantages that prevented Boeing from going bankrupt, they did not always survive and trail Airbus. The next leader to replace Calhoun is an important question considering he announced he will retire at the end of the year.
(the the)
