BOEING COMPANY IS LOSING CUSTOMERS, REPUTATION AND MARKET

BOEING COMPANY IS LOSING CUSTOMERS, REPUTATION AND MARKET

BOEING COMPANY IS LOSING CUSTOMERS, REPUTATION AND MARKET
The Boeing Corporation has been experiencing one of the most difficult financial periods recently. The triggering mechanism for this situation was the plane crashes that occurred in 2018 and 2019.

First, it was the death of 189 people near Jakarta, and then, in March 2019, the death of 346 passengers and crew near Addis Ababa. Recently it became known that for the first time since 1962, the company did not receive a single new order for the production of aircraft. The reason for the failure of potential customers to cooperate with the company is quite simple - a decrease in the index of confidence in the quality of products.

According to last year's results, Boeing turned out to be a loss-making company. The amount  of losses got to $ 636 million (a year earlier the profit exceeded $ 10.4 billion). This could not but affect the management policy of the corporation: management suspended the repurchase of shares. Revenue was reduced by 37% compared to last year.

In January 2020, Boeing delivered a total of 13 aircraft, while over the same period in 2019, 46 airliners were sold. It is worth noting that this year the company planned to sell other  45 planes, but buyers refused to pay for the order. And this is not to mention the ill-fated 737 MAX models, the production of which is completely suspended after the crash.

And while international rating agencies continue to lower both long-term and short-term Boeing ratings (to F2), the company's failures were a success for its main competitor - Airbus Corporation, which received pre-orders for 274 airliners. The Airbus A320 model became the best-selling by October 2019, surpassing the Boeing 737 model, which had been leading for more than half a century. Since 2011, Airbus has become the largest company in the field of aircraft construction for the first time.

Many experts are not inclined to overly dramatize the situation with Boeing. Remaining a fairly strong company with a high credit of trust, Boeing, judging by the measures taken, seeks to actively conduct anti-crisis measures in order to resume its stable work and former reputation. CEO David Calhoun has repeatedly stated the need to resume operation of the 737 MAX models after addressing the causes that led to the disaster. By the way, during the checks that took place after the disasters, serious comments were revealed in the liner management system.

The uniqueness of the current situation with Boeing company is that airlines abandoned the use of 737 MAX airliners before the authorities officially announced the ban. And although the American corporation will have to pay forfeits, having lost the value of shares, this is not the greatest danger. The main thing is to regain confidence and relieve ordinary passengers from the fear of flying Boeing planes, which will be very difficult to do.


20.02.2020





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