In a recent announcement, Boeing's Chief Financial Officer, Brian West, discussed the company's plans to address safety and reliability issues that have plagued its planes and reputation in recent months. The decision comes in the wake of the Alaska Airlines Flight 1282 incident, where a door blowout occurred on an Alaska Airlines Boeing 737-9 Max jet.

During the Bank of America's Boeing company conference, West acknowledged the need for improvements in safety, quality, and conformance. Specifically, he highlighted the importance of addressing a practice known as "traveled work" in the aviation industry. This refers to tasks that are delayed or completed in a factory location different from the original plan.

Boeing had been accepting fuselages and assemblies from Spirit AeroSystems, but workers noticed that these assemblies did not conform to Boeing's expectations. As a result, the assemblies were used in manufacturing and later repaired. To rectify this issue, West announced that as of March 1, Boeing will no longer travel work between Wichita and its fuselage supplier. Instead, the company will only accept fully conforming fuselages from Spirit AeroSystems. However, this might lead to potential variability in supply in the near term.

Boeing's internal report revealed that traveled work resulted in longer labor hours for tasks and interfered with the company's ability to complete other planned work, causing significant delays. Investigators noted that Boeing workers had identified these issues when fuselages arrived from Spirit AeroSystems, but the problems were not immediately addressed. Consequently, faulty fuselages were sent to the next workstation, ultimately resulting in the Alaska Airlines incident.

By ceasing to accept defective parts from Spirit AeroSystems, Boeing aims to enhance its operations at the Renton assembly plant, making them more efficient. West also hinted at discussions to reacquire Spirit AeroSystems, which Boeing had spun off almost two decades ago. This potential integration is seen as a move that prioritizes safety and quality.

However, these changes to the traveled work process and potential disruptions in fuselage supply are expected to have a substantial financial impact on Boeing. West estimated that the company's free cash flow in the first quarter of this year would be negatively affected by $4 billion to $4.5 billion. Additionally, full-year free cash flow is projected to be in the "low-single-digit billions," significantly lower than the $4.46 billion achieved in 2023. This significant decline highlights the magnitude of the cash flow burn in the first quarter.

Regarding production, West indicated that 737 production would be lower in the first half of the year but aims to improve in the second half, targeting the Federal Aviation Administration (FAA)-approved rate of 38 planes per month.

As Boeing takes steps to rectify safety concerns and enhance production processes, the company continues to grapple with the financial consequences of these challenges. The industry is keenly observing Boeing's efforts to regain trust and secure a more stable future.