SEATTLE: Boeing on Wednesday named aerospace industry veteran Kelly Ortberg as its new President and CEO after a months-long search, tasking the former Rockwell Collins executive with the monumental job of turning around the struggling planemaker. Ortberg will start on Aug. 8 facing a multitude of issues, including reviving the company’s jet production and rebuilding trust with regulators, the industry and the flying public.

Boeing, one of two global planemaking giants, has been mired in a reputational and safety crisis after a January 5 mid-air panel blowout on an Alaska Airlines-operated MAX 9 jet carrying 171 passengers. The company said Wednesday that it had also lost $1.4 billion loss in the quarter as it continues to burn cash.

The Jan. 5 incident led to the eventual resignation of CEO Dave Calhoun and departure of the company’s previous board president as regulators took aim at the safety culture that was already shaken by previous crashes in 2018 and 2019. Shortly after the incident on Jan 5, the US Federal Aviation Administration (FAA) barred Boeing from expanding production of its cash-cow 737 MAX family of jets without estimating how long the limitation will last. The US aviation regulator capped production of 737 MAX jets at 38 per month, though Reuters has reported that Boeing has been producing jets during some weeks at a much lower level.

The regulator on Feb 28 gave Boeing 90 days to develop a comprehensive plan to address “systemic quality-control issues,” which the company submitted in May. However, the FAA’s administrator has said Boeing would not be immediately allowed to increase 737 MAX production.

Shares rose 2.9 percent in premarket trading.

That has led to lower deliveries, frustrating customers. During the second quarter, Boeing delivered a total of 92 aircraft, down 32 percent from last year.

The company posted a loss of $2.33 a share in the second quarter, as its troubled defense and space business exacerbated the financial strain on the US planemaker that has already scaled back commercial aircraft production. Boeing’s Defense, Space and Security unit, one of its three main businesses, has lost billions of dollars in 2023 and 2022, which executives attributed to cost overruns on fixed-price contracts.

Such contracts have high margins but leave defense contractors vulnerable to inflationary pressures that have dented US corporate earnings in the last few years. The planemaker used to bid aggressively for fixed-price contracts before the pandemic, but has now said it would pivot away from such contracts to stem losses at the business, which amounted to $1.76 billion last year. Ahead of last week’s Farnborough Air Show, the unit’s head had said it was “significantly challenged” during the quarter. Boeing CFO Brian West said in May the planemaker will burn rather than generate cash in 2024, hamstrung by lower jet deliveries compared to last year. – Reuters