Source of this article: Times Weekly Author: Ma Huan Shi Enze
Five major aerial accidents in five years, and Boeing with broken wings is still in a quagmire.
On March 21, 2022, a Boeing 737 passenger plane of China Eastern Airlines lost contact over Wuzhou while performing a flight mission in Kunming-Guangzhou. According to the official website of the Civil Aviation Administration of China, it has been confirmed that the plane has crashed. There were 132 people on board, including 123 passengers and 9 crew members. The Civil Aviation Administration has activated the emergency mechanism and sent a working group to the scene.
According to People's Daily , in response to the crash on March 21, China Eastern Airlines has activated the emergency mechanism and established nine special working groups including aircraft disposal, accident investigation, family assistance, logistics support, legal support, public relations, security protection, financial insurance, passenger and cargo disposal.
According to Xinhua News Agency , a relevant person in charge of Boeing China said that Boeing has seen relevant reports and is collecting more information.
The accident occurred in this case. Boeing 737-800 series aircraft. Before this, due to two consecutive crashes, the Boeing 737MAX has been banned from flying by many countries including China and is still resuming flights one after another.
Boeing 737 is a twin-engine narrow-body passenger aircraft produced by Boeing and is the best-selling passenger aircraft in the history of civil aviation. Once upon a time, there were an average of 1,250 Boeing 737 s flying in the world, and one takes off and lands every 5 seconds.
Chicago, USA, Boeing's headquarters building (Photo source: Visual China)
However, in recent years, accidents have occurred frequently and compensation has been continuously reported. In addition, key aircraft banned from flying, Boeing's proud 737 passenger aircraft series is facing more and more safety questions, resulting in company losses and struggling to make progress.
As of press time, Boeing (BA:NYSE) pre-market stock price was US$192.83, down 5.14%; China Eastern Airlines (CEA:NYSE) pre-market stock price was US$19.03, down 10.93%; China Southern Airlines (ZNH:NYSE) pre-market stock price was US$30.66, up 16.71%.
loses to selling land to cash out
As a former aircraft giant, Boeing's net profit in 2018 was as high as US$10.46 billion (approximately RMB 66.5 billion), but it has been losing money since 2019. Coupled with the impact of the new crown pneumonia epidemic, Boeing's net loss in 2020 reached US$11.941 billion (approximately RMB 75.9 billion). Although Boeing's net loss in 2021 eased, it still lost US$4.29 billion (approximately RMB 27.3 billion).
(Picture source: Boeing Company's 2021 financial report)
It is worth mentioning that Boeing is not a company that simply "sells aircraft". In fact, the company's business can currently be divided into four sectors, namely Civil Aircraft Group (referred to as "Boeing Commercial"), Defense, Space and Security Group (referred to as "Boeing Defense"), Boeing Global Service Group (referred to as "Boeing Service") and Boeing Financial Company (referred to as "Boeing Finance").
, Boeing's losses in 2021 have eased, mainly relying on the past of the ban on flights. More than 170 countries and regions have agreed to resume flights of 737MAX, thus allowing the previously undelivered 737MAX to be delivered, which has increased the revenue of US$3.331 billion.
It is worth noting that according to the data statistics of Boeing's official website, a reporter from the Times Weekly found that in the 22 years from 2000 to 2022, Boeing delivered a total of 1,413 (including cargo aircraft) 737 series aircraft to China. Among them, the top five airlines are China Eastern Airlines 217 aircraft, China Southern Airlines 201 aircraft, Air China 204 aircraft, China Xiamen Airlines 156 aircraft, and China Hainan Airlines 147 aircraft.
Secondly, Boeing's revenue in "Boeing Defense" (that is, "selling military industry") has accounted for 43% of the company's total revenue. According to Boeing's 2021 financial report, Boeing's defense revenue exceeded its "aircraft sales" revenue in 2020 (31%).
(Picture source: Boeing 2021 financial report)
However, even if Boeing continues to sell products desperately, it is inevitably trapped in a cash flow crisis.
Boeing wrote in its 2021 financial report, "We have significantly increased our debt balance since 2019, mainly affected by the impacts related to the grounding of 737MAX and the COVID-19 pandemic." At the same time, Boeing also mentioned that its debt problems caused the company's credit rating to be downgraded.As of December 31, 2021, Boeing's total debt reached US$58.1 billion, of which approximately US$11.4 billion of the outstanding principal will mature within the next three years.
To this end, Boeing has made a series of efforts, first laying off 30,000 employees at the end of 2021 and selling its commercial aircraft headquarters park in Seattle, Washington for US$100 million (about RMB 637 million).
In addition, according to the Seattle Times statistics, Boeing has successively sold seven office park buildings (selling for $139 million), a large warehouse (selling for $35 million), 310 acres of unused land next to the manufacturing plant (selling for $200 million), and two office buildings (selling for $12 million). This series of operations allowed Boeing to successfully cash out $386 million.
(Image source: Seattle Times)
Former Chief Financial Officer of Boeing Greg Smith said in 2020 that the company is "reviewing every real estate, every building, every lease, every warehouse, every venue", with the goal of reducing the company's total real estate scale by 30%. However, Regory, who has held the position for ten years, announced his retirement in April 2021. The dilemma of
737 model
's continuous losses are related to frequent accidents in the Boeing 737 series models in the past five years.
On October 29, 2018, a Boeing 737MAX8 aircraft from Jakarta to Bangka Penang Port crashed. This is a Boeing 737MAX8 aircraft with a plane age of only 0.3 years. All 188 passengers and seven flight attendants on board were killed.
is also a Boeing 737MAX8. On March 10, 2019, an Ethiopian Airlines , a passenger plane of this model took off from the Ethiopian capital Addis Ababa . Shortly after the plane took off, near Bissovtu, about 45 kilometers from the take-off, carrying 149 passengers and 8 crew members. The accident killed 157 people, including 8 Chinese.
Boeing has said that the profit and delivery volume in January 2019 will hit record numbers thanks to the best-selling 737MAX series. Data shows that the price of 737MAX8 is US$121.6 million. As of January 2019, 4,661 Boeing 737MAX aircraft were ordered, accounting for about 80% of the company's orders.
However, two air crashes occurred within half a year, and the models involved were all 737MAX8, which completely ruined Boeing's dream of growth. After that, the order volume of Boeing 737MAX fell sharply, and the company's performance instantly fell to the bottom. A series of investigations and customer compensation also made Boeing's financial situation worse.
Boeing faces multiple lawsuits from families of victims, accused of neglecting supervision of the design, production and certification of the 737MAX and did not ground the MAX model after the first air crash.
On January 8, 2020, a Ukrainian passenger plane crashed near the Tehran Khomeini International Airport. The plane carried 170 passengers and the model of the plane was Boeing 737-800. It quickly crashed in the Paland area near the airport, and all the people on board were killed.
On January 8, 2020, a Ukrainian passenger plane crashed near Tehran Khomeini International Airport. The aircraft model is Boeing 737-800. (Photo source Getty Images)
The Ukrainian Embassy in Tehran said that the passenger plane was not shot down. The embassy made it clear in a statement that, according to preliminary information, the crash was caused by an engine failure caused by technical reasons. The
air crash and the ensuing COVID-19 pandemic have made Boeing experience its worst year: in January 2020, Boeing did not receive any new aircraft orders for the first time in 58 years; on March 6, 2020, Boeing's stock price also plummeted from the highest before the air crash to $262. Data shows that the global ban on flight 737Max has caused the company to lose at least $18 billion.
On January 9, 2021, an Boeing 737-500 passenger plane of Indonesian Sanfoqi Airlines lost contact shortly after taking off from the capital Jakarta. It was then found that it crashed in the waters near Jakarta. There were 56 passengers and 6 crew members on board, and no one survived. Under more than
accidents and losses, the US Treasury Secretary even stated that the Boeing crisis will cause the US economic growth rate to decline by 0.5 percentage points in 2020. Meanwhile, Boeing CEO O David Calhoun still received a salary of $21.1 million this year.
The U.S. Congress said Boeing was eager to produce, neglect internal safety issues, and concealed key changes including pilot training needs, which were the causes of multiple accidents. The U.S. Congress also accused FAA for monitoring errors including "over-authorization of Boeing".
In the face of safety hazards, Boeing has been working hard and has also been recognized by relevant departments in the United States. Boeing's safety experts said the direct cause of the 737MAX accident has been resolved. The Federal Aviation Administration believes that the design changes in its requirements have eliminated the causes of these special accidents. The head of the Federal Aviation Administration also said he is "100% confident" in the safety of the aircraft.
European and US regulators approved the resumption of 737MAX in 2020. In December 2021, the Civil Aviation Administration of China stated that 737MAX is expected to resume commercial operations of existing domestic fleets by the end of 2021 or early 2022, and restart the introduction of new aircraft.
But this series of accidents obviously makes it difficult for passengers to change their mindset about Boeing quickly. Now, with another air crash, it may be difficult for Boeing 737MAX to resume flights in China in the near future.
As the biggest representative of the US manufacturing industry, Boeing has not yet emerged from the shadow of the new crown pneumonia epidemic, and 2022 may be more difficult.
As of December 31, 2021, Boeing's total debt reached US$58.1 billion, of which approximately US$11.4 billion of the outstanding principal will mature within the next three years.To this end, Boeing has made a series of efforts, first laying off 30,000 employees at the end of 2021 and selling its commercial aircraft headquarters park in Seattle, Washington for US$100 million (about RMB 637 million).
In addition, according to the Seattle Times statistics, Boeing has successively sold seven office park buildings (selling for $139 million), a large warehouse (selling for $35 million), 310 acres of unused land next to the manufacturing plant (selling for $200 million), and two office buildings (selling for $12 million). This series of operations allowed Boeing to successfully cash out $386 million.
(Image source: Seattle Times)
Former Chief Financial Officer of Boeing Greg Smith said in 2020 that the company is "reviewing every real estate, every building, every lease, every warehouse, every venue", with the goal of reducing the company's total real estate scale by 30%. However, Regory, who has held the position for ten years, announced his retirement in April 2021. The dilemma of
737 model
's continuous losses are related to frequent accidents in the Boeing 737 series models in the past five years.
On October 29, 2018, a Boeing 737MAX8 aircraft from Jakarta to Bangka Penang Port crashed. This is a Boeing 737MAX8 aircraft with a plane age of only 0.3 years. All 188 passengers and seven flight attendants on board were killed.
is also a Boeing 737MAX8. On March 10, 2019, an Ethiopian Airlines , a passenger plane of this model took off from the Ethiopian capital Addis Ababa . Shortly after the plane took off, near Bissovtu, about 45 kilometers from the take-off, carrying 149 passengers and 8 crew members. The accident killed 157 people, including 8 Chinese.
Boeing has said that the profit and delivery volume in January 2019 will hit record numbers thanks to the best-selling 737MAX series. Data shows that the price of 737MAX8 is US$121.6 million. As of January 2019, 4,661 Boeing 737MAX aircraft were ordered, accounting for about 80% of the company's orders.
However, two air crashes occurred within half a year, and the models involved were all 737MAX8, which completely ruined Boeing's dream of growth. After that, the order volume of Boeing 737MAX fell sharply, and the company's performance instantly fell to the bottom. A series of investigations and customer compensation also made Boeing's financial situation worse.
Boeing faces multiple lawsuits from families of victims, accused of neglecting supervision of the design, production and certification of the 737MAX and did not ground the MAX model after the first air crash.
On January 8, 2020, a Ukrainian passenger plane crashed near the Tehran Khomeini International Airport. The plane carried 170 passengers and the model of the plane was Boeing 737-800. It quickly crashed in the Paland area near the airport, and all the people on board were killed.
On January 8, 2020, a Ukrainian passenger plane crashed near Tehran Khomeini International Airport. The aircraft model is Boeing 737-800. (Photo source Getty Images)
The Ukrainian Embassy in Tehran said that the passenger plane was not shot down. The embassy made it clear in a statement that, according to preliminary information, the crash was caused by an engine failure caused by technical reasons. The
air crash and the ensuing COVID-19 pandemic have made Boeing experience its worst year: in January 2020, Boeing did not receive any new aircraft orders for the first time in 58 years; on March 6, 2020, Boeing's stock price also plummeted from the highest before the air crash to $262. Data shows that the global ban on flight 737Max has caused the company to lose at least $18 billion.
On January 9, 2021, an Boeing 737-500 passenger plane of Indonesian Sanfoqi Airlines lost contact shortly after taking off from the capital Jakarta. It was then found that it crashed in the waters near Jakarta. There were 56 passengers and 6 crew members on board, and no one survived. Under more than
accidents and losses, the US Treasury Secretary even stated that the Boeing crisis will cause the US economic growth rate to decline by 0.5 percentage points in 2020. Meanwhile, Boeing CEO O David Calhoun still received a salary of $21.1 million this year.
The U.S. Congress said Boeing was eager to produce, neglect internal safety issues, and concealed key changes including pilot training needs, which were the causes of multiple accidents. The U.S. Congress also accused FAA for monitoring errors including "over-authorization of Boeing".
In the face of safety hazards, Boeing has been working hard and has also been recognized by relevant departments in the United States. Boeing's safety experts said the direct cause of the 737MAX accident has been resolved. The Federal Aviation Administration believes that the design changes in its requirements have eliminated the causes of these special accidents. The head of the Federal Aviation Administration also said he is "100% confident" in the safety of the aircraft.
European and US regulators approved the resumption of 737MAX in 2020. In December 2021, the Civil Aviation Administration of China stated that 737MAX is expected to resume commercial operations of existing domestic fleets by the end of 2021 or early 2022, and restart the introduction of new aircraft.
But this series of accidents obviously makes it difficult for passengers to change their mindset about Boeing quickly. Now, with another air crash, it may be difficult for Boeing 737MAX to resume flights in China in the near future.
As the biggest representative of the US manufacturing industry, Boeing has not yet emerged from the shadow of the new crown pneumonia epidemic, and 2022 may be more difficult.
