00:00And John Strickland is an independent aviation business strategist.
00:05John, great to have you on the show again.
00:06So Boeing narrowed its net loss from last year, but its second quarter earnings fell short of estimates.
00:12So how sustainable are the poor results for them in the long run?
00:17Well, I think this was good news for Boeing today.
00:20The company, in my view, is certainly moving strongly back in the right direction
00:25after challenging several years, stemming right back to the two tragic Boeing 737 MAX crashes
00:32and the spotlight being absolutely justifiably on the company for safety breaches and poor performance.
00:40Now we're seeing the airline, or rather we're seeing the air, the manufacturer run by a new CEO.
00:45He's been in place now a couple of years.
00:47I had a chance to meet him very briefly at the UK Farnborough Air Show last week.
00:51I think he's the right man for the job coming from an engineering background.
00:55The company needed to get back to its origins.
00:58It was always a strongly engineering-led company.
01:01It had lost that with more emphasis on commercial considerations.
01:05He walked the talks.
01:06He's put his own office back to Seattle rather than Midwest or Washington,
01:10which is what had happened previously.
01:12And I think that reflects now in the company being able to move upward in production numbers,
01:16particularly on this workhorse 737 model,
01:19because if it's been able to satisfy safety regulators, that is justified.
01:23It can support increased production to eat into what you described there
01:27as those substantial delayed production backlogs that it has.
01:31Well, Boeing, one of its priorities now is to stabilise its production,
01:35but we see the company has a backlog of more than 6,800 jets.
01:40So they seem to be making some progress regardless.
01:43How much do you think supply chain disruptions are impacting production?
01:48They still are having an impact, both for Boeing and indeed Airbus
01:52and right across the aerospace sector.
01:54A lot of skilled labour was lost through the pandemic.
01:57There's been shortages of supply of some key materials used in production.
02:02But workarounds are being found.
02:05As I mentioned, production rates are stepping up.
02:08Airlines are certainly frustrated at having to wait.
02:10I mean, outwith the actual supply chain challenge, Boeing is still waiting to get certification
02:15of its Boeing 777X.
02:17Now, that's the newest long-haul, large-capacity airline,
02:21which should have been in service already seven or eight years ago.
02:24It now looks more optimistically like it will get certification this year
02:28and start to deliver to airlines, including Dubai's Emirates, next year.
02:33But I think under the new leadership, the focus is on making sure
02:37that there is no cutting corners on quality.
02:40There is a focus on safety culture, keeping customers happy.
02:44And that means delivering aircraft as on time as possible
02:48and to the safety standards that are expected from a company like Boeing.
02:52John, thank you very much for your analysis.
02:54John Strickland, an independent aviation business strategist.
02:57John Strickland, an independent aviation business strategist.
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