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Plane maker posts 28% jump in first-quarter revenue, smaller net loss.
Boeing Co. BA 1.81%increase; green up pointing triangle said a new production problem expected to delay deliveries of its 737 jets to airlines this summer won’t disrupt the plane maker’s overall financial outlook for the year.
The Arlington, Va., aerospace company said Wednesday revenue rose 28% to $17.9 billion in the first quarter from the same period the previous year, beating analysts’ estimates. Boeing said it delivered 130 commercial aircraft in the three months ended March 31 as demand for new airliners remained robust.
Despite the emergence this month of a supplier’s 737 manufacturing slip-up, the company said Wednesday it plans to increase production of the narrow-body jets to 38 a month later this year, up from the current rate of 31.
Shares in Boeing rose 84 cents to $203.03 each on Wednesday, while broader U.S. stock indexes were mixed.
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Boeing has said the new manufacturing problem, related to certain fittings at the rear of the planes’ fuselage, will delay a number of deliveries of 737s in coming months. Airline and airplane-leasing customers tend to pay most of planes’ purchase price at delivery.
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GE and Pratt & Whitney deliveries surge as travel rebounds and airlines prep for busy summer
General Electric’s aero-engine models on display at an exhibit in Shanghai late last year. GE, helped by growing engine deliveries, recorded sales and profits that beat expectations. PHOTO: CFOTO/ZUMA PRESS
Global airline passenger traffic this year is set to surpass 2019 levels despite recessionary fears, providing a boon for jet-engine makers.
General Electric Co. and Raytheon Technologies Corp., RTX 1.98%increase; green up pointing triangle the two biggest makers of plane engines, on Tuesday disclosed stronger quarterly financial results, reflecting the continued recovery in air travel and China’s relaxation of pandemic-driven restrictions.
Airlines preparing for a busy summer travel season are driving sales of spare parts at GE GE 1.53%increase; green up pointing triangle, Raytheon and other suppliers. Aircraft manufacturers Boeing Co. BA 1.75%increase; green up pointing triangle and Airbus SE are also delivering more jets following a surge in orders. Boeing reports quarterly results Wednesday.
“The recovery has strengthened as the world is eager to travel,” said GE Chief Executive Larry Culp on an investor call Tuesday.
Global air passenger traffic climbed 70% last year as more countries lifted restrictions, and big domestic markets such as the U.S. experienced a surge in business that left airlines and airports struggling to keep up. The rise in airfares driven by demand and higher fuel prices isn’t cooling growth, especially in regions such as Asia where traffic has been slower to improve.
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American, Southwest project busy travel season after winter slowdown
Airlines say that travel demand is picking up heading into the critical summer travel season, fueling their expectations for profits after what was in some cases a more lackluster winter.
Southwest Airlines Co. decrease; red down pointing triangle reported a quarterly loss of $159 million as the impact of the airline’s winter meltdown bled into the first months of the year. The airline said it saw a $325 million hit to revenue due to cancellations of “holiday return travel” and slower bookings in January and February but said bookings turned around by March.
Over the winter holidays, storms overwhelmed Southwest’s operation and crew-rescheduling software couldn’t keep pace to reset the airline.
American Airlines Group Inc. increase; green up pointing triangle reported a profit of $10 million on record first-quarter revenue of $12.2 billion.
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Several rivals posted losses during the first quarter, which is typically the weakest time of year for airlines. Lucrative corporate travel, which has yet to return to prepandemic levels, didn’t fill in for the typical drop-off in vacation travel after the winter holidays. At the same time, carriers grappled with higher costs for fuel.
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Airline resumes departures after a data-connection problem led to a pause
Southwest Airlines Co. decrease; red down pointing triangle flight delays persisted Tuesday, affecting over half the airline’s flights as it grappled with fallout from a technology problem that briefly halted its operation earlier in the day.
The Federal Aviation Administration said it had canceled Southwest’s pause in departures, which the airline had requested earlier in the day because of an internal technical issue at the carrier.
Southwest said it temporarily halted flights Tuesday to work through data-connection issues. The airline said a firewall supplied by a vendor went down and “connection to some operational data was unexpectedly lost.”
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Riyadh Air is trying to use its geographic position to attract fliers
Boeing aircraft under construction at a facility in Everett, Wash.
RIYADH, Saudi Arabia—This oil rich kingdom unveiled a new international airline called Riyadh Air, aiming to compete with a handful of other Middle Eastern carriers that have used their geography to build world-class airlines and attract business travelers and tourists.
Saudi Arabia’s sovereign-wealth fund, the Public Investment Fund, is close to committing to a big order of Boeing Co. BA 0.15%increase; green up pointing triangle jets to underpin the new airline, The Wall Street Journal first reported over the weekend. A deal, which could be announced as early as this week, would be a boon for the aircraft maker and a big bet by Riyadh that it can compete in an already-crowded regional aviation market.
The new airline—and the billions of dollars in jet purchases it will require—comes as Saudi coffers swell on the back of higher crude prices. The windfall has helped Crown Prince Mohammed bin Salman push ahead on some of his most ambitious efforts in trying to diversify the economy away from the booms and busts that come with its prodigious oil industry.
Separately on Sunday, Saudi Arabian Oil Co., known better as Aramco, reported record annual profit of $161 billion for 2022, the largest ever by an energy firm. The bumper earnings reflect a turnaround for the industry—and petrostates such as Saudi Arabia—after the Ukraine war lifted oil prices and upended commodity flows.
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Carrier is seeking to reinvent itself as a rival to the world’s biggest airlines
Air India’s order marks the largest deal for commercial aircraft in aviation history.
Air India Ltd. ordered 470 jets from Boeing Co. BA 0.15%increase; green up pointing triangle and Airbus EADSY -1.38%decrease; red down pointing triangle SE, marking the largest deal for commercial aircraft in aviation history and coming as airlines scramble for jets to meet surging demand for air travel.
The airline said it has agreed to purchase 250 Airbus jets and 220 Boeing planes, surpassing a deal for 460 planes by American Airlines in 2011. The deal is aimed at providing more planes to supply India, which is expected to be the fastest-growing major aviation market in the world.
The Boeing orders, based on the planes’ list prices, came in at $45.9 billion, including options. Airbus no longer quotes list prices for its jets. Based on analysts’ estimates, the deal’s total value was around $85 billion before discounts. The previous record—a 2013 order for Boeing 777X jets by Emirates Airline—was valued at about $75 billion. Airlines don’t typically pay list price, instead benefiting from large, undisclosed discounts.
The Boeing order was first announced by the White House, with the Airbus deal unveiled by Indian Prime Minister Narendra Modi and French President Emmanuel Macron at a joint press conference. President Biden later discussed the deal with Mr. Modi, according to the White House.
Airbus, buoyed by the Air India deal, is planning to boost production rates of its two biggest models as it tries to capitalize on resurgent demand for long-haul travel, The Wall Street Journal separately reported. Boeing has pushed back planned production increases because of supplier shortages, though it still hopes to raise output this year.
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The $100 million fund, backed by other big businesses, was accelerated by U.S. climate law
United Airlines has been one of the most aggressive airlines in acting on climate change.
United Airlines Holdings Inc. red down pointing triangle is launching a fund backed by several big-name aerospace and financial companies to invest in startups aiming to produce sustainable aviation fuel, in one of the largest efforts yet to lower emissions from air travel.
Created through United’s venture investing arm, the new fund will start with more than $100 million from the company and partners including Air Canada ; red down pointing triangle, Boeing Co., green up pointing triangle JPMorgan Chase & Co., Honeywell International Inc. red down pointing triangle and General Electric Co., decrease; red down pointing triangle United said Tuesday.
Last year’s climate law spurred United to accelerate the fund, which will be capped at $500 million, the company said.
United, Air Canada and other airlines that participate are expected to sign clean-fuel supply agreements with the startups they back. Companies that invest alongside United could share in the carbon credits tied to the production of that sustainable aviation fuel, the company said.
The new fund will be one of the largest sources of cash in the nascent industry of making low-carbon jet fuel. Its launch highlights the pressure faced by the airline industry to reduce emissions. It is part of a recent move by large companies toward startup investing to develop green-energy technologies.
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Aircraft order would add Boeing 787s to new airline Riyadh Air and Saudi Arabia’s existing carrier Saudia
Boeing’s 787 Dreamliners, under construction at a company facility in South Carolina, are popular for their fuel efficiency.
Two Saudi Arabian airlines are nearing a deal to buy a total of about 80 Boeing Co. BA 0.15%increase; green up pointing triangle 787 Dreamliners with options for some 40 more, people familiar with the matter said, another significant order for the American aircraft manufacturer.
Riyadh Air, a new airline launched by the Saudi sovereign-wealth fund over the weekend, is expected to commit to purchasing 39 of the wide-body jets, while existing carrier Saudia is expected to buy the same number of jets, these people said.
The agreement, which is expected to be announced as early as Tuesday, is expected to come with options to buy about 40 additional Dreamliners among the airlines, these people said.
The Wall Street Journal over the weekend reported that the Boeing aircraft order was valued at about $35 billion, according to people familiar with the matter. It couldn’t be immediately determined whether that included the typically steep discounts aircraft makers give their customers, or whether that figure included the jets for Saudia too.
The wide-body jets are popular among the world’s airlines for their fuel efficiency and ability to profitably carry passengers on long-haul international routes. Each carries a list price of about $300 million before typical discounts, according to Boeing’s latest publicly available list prices.
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