- Traveled work, rework are still obstacles
- 777X certification running late; customers now see first deliveries in 4Q2026
By Karl Sinclair
Sept. 17, 2025, © Leeham News: “We were almost at parity on deliveries with Airbuses last month…. We’re getting there.”
Kelly Ortberg, the CEO of The Boeing Co. Credit: Boeing.
That was the opening salvo from The Boeing Company (BA) and CEO Kelly Ortberg, as it begins to claw its way back from the depths after a difficult six-year stretch.
Speaking at the Morgan Stanley Laguna Conference, Ortberg closed his interview by remarking on how close Boeing was getting to delivering aircraft at levels only recently seen by Airbus.
“I feel really good one year in that my plan is working, that we put together. People are getting excited. Customers are feeling better,” he said.
However, the deliveries comparison with Airbus isn’t precisely an even match. Boeing has finally cleared its inventory of 737 MAXes, a six-year task from when the MAX was grounded for 21 months beginning in March 2019 and extending through the extended recovery period of the COVID-19 pandemic.
Airbus, meanwhile, has about 60 A320neo family airplanes in storage awaiting engines from CFM International and Pratt & Whitney. Based on production rates, Airbus has a 60% share vs Boeing’s 40%.
Still much to be done
Ortberg acknowledged that Boeing is on the right path but has a way to go. “I think we’re turning the corner, but we haven’t fully turned the corner,” he explained.
He detailed the laundry list of items that the company still needs to overcome, as it struggles to regain its footing, including:
- The 737-7 & 10 MAX certification, which is now pushed into 2026, as Boeing engineers work through a solution for the engine anti-ice problems.
- Ortberg called the 777X certification process “The mountain of work [that] is still there” and lamented how the program still has not received full Type Inspection Authorization (TIA) authority, with five test aircraft flying.
- The one key performance indicator (KPI) of the six measurables used, which still haunts Boeing Commercial Aircraft (BCA), is re-work. Costly post-production tasks must be performed by teams pulled from the production process.
- Streamlining the certification process with the FAA.
“We’re getting incremental TIAs, which give us some limited capability of being able to get the [777X] certification credit done. We still don’t have authorization from the FAA for a good portion of the certification program,” Ortberg explained.
The Boeing 777-9. Credit: Boeing.
Entry into service date likely to slip
Boeing targeted an entry into service of 2019 for the 777X. However, six years later, no timeline was offered for when customers would begin receiving their orders, which has cost Boeing dearly. But LNA is told that the lead customers now don’t expect the first 777-9 deliveries until sometime in the fourth quarter next year. Boeing had told customers to expect the first deliveries in June.
“It’s really important because, as you know, even a minor schedule delay on the 777 program has a pretty big financial impact because we’re in a reach-forward loss situation,” Ortberg acknowledged.
The impact has been quite significant, as Boeing has now accumulated $10.83bn in reach-forward losses and charges on the program, and has added another $1.072bn in deferred production costs in 1H2025 into Inventory, after writing off $3.5bn in FY2024.
“We can’t size a potential charge, but 777X cash flow including advances should gradually improve from 2025,” wrote JP Morgan’s investment analyst after the Ortberg announcement. “A delay-driven charge would stem from 1) concessions to customers for late deliveries and 2) running the production system for longer to deliver the 500 units in the accounting quantity; in other words, the cash flow implications of another forward loss would likely stretch over several years. In 3Q24, Boeing took a $2.6bnn forward loss on 777X when it delayed EIS to 2026 from 2025.”
It is doubtful that once all developmental costs are totalled, alongside the annual write-offs, the 777X program will ever be profitable for the company.
Related Stories
Ortberg stands by his plan to begin a “Keystone Review” of the 737MAX, with the FAA to obtain authorization to bump production rates to 42/mo, up from the current 38/mo (and then onto 47/mo). When asked about timelines, he admitted the need to stabilize production at each level, demonstrating the capability to perform comfortably at each stage, before moving on.
“I’ve said this all along, and it’s important, is we’ve got to do this right, and we are not going to push. If we’re not ready, we’ll wait a month. A month will not matter in the big scheme of things. Losing stability will matter. We’re going to make sure we’re governing ourselves, doing the right thing and building a quality airplane,” he said.
Ortberg also underlined the need to ramp up production steadily to reach profitability. The focus appears to be on producing a high-quality product for customers, while allowing the financial picture to follow the process naturally.
This is quite the change in stance from previous managers, who are on the record promising to “return 100% of free-cash-flow” to investors.
Cash bleed
Ortberg was queried about the promise made in 2022 that Boeing would be generating $10bn in free cash flow (FCF) once specific production rates were hit.
He was clear where his focus was, “Far and away, our priority is debt. Through this crisis we’ve been through, we’ve taken on way too much debt. So, as we come back and we start generating cash, we want to be solidly investment-grade, and we need to be there for the next-generation airplane as we start to think about that. We’re going to be servicing our debt here as a key priority for us as we return to positive cash.”
Perhaps this is not the tune that investors want to hear, but it is the prudent course of action.
With an upcoming ~$700m penalty payment to the Department of Justice, a result of the 737 MAX door-plug blowout accident, Boeing expects 2025 to have a cash-burn somewhere in the region of $3.5bn.
Ortberg declined to offer any guidance on FCF for 2026 when asked, preferring instead to focus on what Boeing was doing to change the way it did business.
Boeing Defense, Space and Security (BDS) update
Ortberg briefly touched on the situation at BDS, once again highlighting the need to stay away from fixed-priced contracts.
“We need to get through the fixed-price programs and move to the next phase where the risks are retired and the profitability is higher.” He further explained, “In many cases, we’ve been able to sit down with the customers and revisit the contract-based lines and make changes to those contract-based lines that allow us to progress and be successful, but also allow them to be successful.”
BDS reported a modest $265m gain on revenues of $12.195bn in 1H2025, which is a marked improvement over the same period last year, when the division lost $762m on sales of $12.971bn.
While Boeing still has a way to go, Ortberg has indicated that the company is focused on key elements: producing quality aircraft, obtaining design certifications so that planes currently in inventory can be delivered, and stabilizing the financial picture through prudent decisions. In short, changing the corporate mentality back to a long-term view, where investments are made for the future benefits of the company and not for short-term gains.
Related Stories
Scott Hamilton, editor of LNA published his second book about Boeing on Sept. 10: The Rise and Fall of Boeing And The Way Back. This continues the 
story that began with his book, Air Wars, The Global Combat Between Airbus and Boeing, published in 2021.
Air Wars focuses on the competition between Airbus and Boeing, and the outsized role of John Leahy, Airbus’s “super-salesman” whom Boeing struggled to best in sales campaigns.
The Rise and Fall of Boeing recounts how Boeing overtook Douglas Aircraft Co. to become the world’s largest producer of jet airliners—only to squander this global leadership position to the upstart Airbus. Hamilton takes the reader through Boeing’s rise and fall—and how it finally is on the way back to its former glory.
Rise and Fall is available on Amazon here.
Air Wars is available on Amazon here; and on Barnes and Noble here.
Related
