Boeing Co. BA-N chief executive Dave Calhoun said on Friday the U.S. plane maker has no current plans to tap equity markets, and signalled a wait of at least two years before launching a new aircraft program.
“There is no plan for an equity raise,” Mr. Calhoun told a conference organized by brokerage Bernstein. “I’m confident on the liquidity front. Cash flow is getting better every quarter. We’re at that stage now where we can start to quietly pay down debt.”
Calhoun also said Boeing had received a “clear” response letter from the U.S. Federal Aviation Administration (FAA) regarding its 787 Dreamliner certification package submission, but there was always work to do postapplication.
Clearing a swollen inventory of twin-aisled Dreamliners and its best-selling 737 Max is vital to Boeing’s ability to emerge from the overlapping pandemic and jet-safety crises, a task complicated by supply chain bottlenecks and war in Ukraine.
Deliveries of the 787 have been halted for a year as Boeing worked through inspections and repairs in an industrial headache expected to cost about US$5.5-billion. Boeing has more than 100 of the advanced composite jets parked in inventory, worth about US$12.5-billion.
Reuters reported last month that the FAA had told Boeing it needed to fill in gaps in its submission.
Mr. Calhoun also said the company is working to achieve production stability on its cash cow 737 Max before it would entertain raising production rates.
737 Max production and deliveries were hit by shortages of a particular wiring connector, Boeing said last month.
The plane maker is also facing an increasingly high-stakes battle to win certification for the largest variant of the 737 MAX before a new safety standard on cockpit alerts takes effect.
Missing the deadline for the 737 Max 10 could require Boeing to revamp the jet’s crew alerting system and mean separate pilot training – raising costs to airlines and putting orders at risk.
Boeing has held talks with some lawmakers about asking for more time, but has not formally sought an extension to address the flight-deck issue.
“Let’s not get to politics, [let’s] work our way through the merits of the airplane with our regulator,” Mr. Calhoun said. “We are totally committed to these airplanes and we intend to deliver them to our customers.”
Mr. Calhoun also said it would be “at least a couple of years” before digital manufacturing tools were mature enough to support a new aircraft program vital to closing a sales gap against European rival Airbus SE.
“When that happens, then we design the next airplane,” Mr. Calhoun said. “Why would I rush?”
Boeing’s timing is also wrapped up in a broader calculus on engine technology and other factors.
Boeing shares were down nearly 1.8 per cent on Friday morning as the Dow Jones Industrial Average dipped 1.0 per cent.
On winning clearance to resume 737 Max deliveries in China, a vital market cut off by trade tensions between Washington and Beijing, Mr. Calhoun said he remained “confident and constructive” but stopped short of predicting a time frame.
“Unfortunately, there’s a pause on that,” he said.
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