Boeing faces a turbulent financial period, reporting a substantial third-quarter net loss of $6.17 billion as ongoing strikes and declining production rates continue to challenge the American aircraft manufacturer.
According to theafricareport.com, the company’s ongoing crisis is wreaking havoc on African airlines including Ethiopian Airlines, Air Algérie and Royal Air Maroc, which have seen their own expansion plans delayed, capabilities hindered and their fleet of aircraft ageing.
The results marked the second-largest quarterly loss for Boeing since mid-2018, before the two crashes of the 737 MAX 8 that claimed 346 lives. Between July and September, the American manufacturer saw its revenue decline by 1% to $17.84bn.
The outlook remains bleak: on the same day the results were announced, the strike by tens of thousands of factory workers which began on 13 September was extended after union members voted against the company’s latest contract offer.
Kelly Ortberg, who became Boeing’s CEO in early August, warned both employees and shareholders on 11 October in separate statements about the current and upcoming difficulties facing the group.
READ: Africa: Ethiopian Airlines leases aircraft as Boeing delivery delays threaten expansion plans
He urged employees to be realistic about the time needed for the company’s recovery, while announcing a 10% reduction in the workforce.
He promised that the company would remain focused on “safety, quality and customer satisfaction”. But the group’s customers are left in uncertainty, with repeated delays in aircraft deliveries resulting in the postponed opening of new routes and interruptions in updating their fleets.
For Ethiopian Airlines, an order for 54 aircraft
While Tim Clark, the president of Emirates, continues to lament the contractual failings of Boeing, promising a “serious conversation”, African airlines have been more restrained. They have less financial and operational strength, and more to lose by alienating one of the only two global manufacturers of large aircraft.
None of the airlines approached by Jeune Afrique responded to requests about the impact of the Boeing crisis on their fleet management and operational development.
Ethiopian Airlines, which had established itself as a major Boeing customer, was particularly affected by the manufacturer’s misfortunes following the crash of an Addis-Nairobi flight in 2019.
However, the airline has consistently expressed its confidence in the company. This was evident with its significant order in November 2023 for 11 of the 787 Dreamliner wide-body aircraft and 20 of the 737 MAX 8 narrow-body aircraft. Boeing described this as “the largest purchase from Africa”.
These aircraft add to the two 777 freighters and 13 other 737 MAX aircraft that the airline was already expecting, alongside eight 777X aircraft ordered in March. No date has been announced for the delivery of this aircraft, which is set to be the first of its kind to fly in Africa.
However, it is now certain that the wait will take years. Boeing CEO Ortberg has said that the first deliveries, originally scheduled for 2021, will not take place until 2026 due to the strike and delays in the aircraft certification process. Ethiopian Airlines’ order remains modest compared to those of competitors like Emirates (205 of the 777X aircraft), Qatar Airways (74) or Lufthansa (27).
Royal Air Maroc’s expansion underway
Currently, Boeing’s order book shows just two aircraft for Royal Air Maroc, comprising two 787-9 wide-body aircraft ordered in September 2023. But the Moroccan airline, which buys exclusively from Boeing, aims to grow from 50 to 200 aircraft by 2037, according to CEO Abdelhamid Addou, an expansion that will involve future acquisitions as well as leasing.
Angola’s TAAG also placed an order with Boeing in September 2023, securing four wide-body aircraft: two 787-9s and two 787-10s.
This list, based on firm orders for new aircraft directly from airlines, does not fully reflect the extent of the crisis for African airlines. Such contracts are not the only way to acquire an aircraft, even new ones. For example, the order signed in May 2023 by Algerian President Abdelmadjid Tebboune for eight Boeing 737 MAX 9s does not appear in Boeing’s order book.
Similarly, Togo’s Asky and Kenya Airways, both exclusive Boeing users for medium-haul flights, do not appear in the manufacturer’s records as they utilise leasing. They are not spared from the crisis either. Due to a lack of aircraft, Asky has yet to launch its long-haul network, particularly to Paris. Meanwhile, Kenya Airways has announced plans to acquire 13 aircraft, most likely Boeing, within the next five years – provided it can obtain them.
