In the midst of its ongoing crisis, Boeing Co. announced that it has abandoned its plan to generate cash flow this year, projecting another significant outflow in the second quarter. The embattled planemaker continues to grapple with multiple challenges, including the need to restore production and increase deliveries.

Chief Financial Officer Brian West revealed that the cash burn in the second quarter is expected to be similar, if not worse, than the previous three months when Boeing depleted nearly $4 billion. This new prediction paints a gloomy picture for the manufacturer's recovery prospects.

One of the major factors contributing to the worsening financial situation is China's request for additional certification on certain aircraft parts. As a result, deliveries to one of the world's most critical aviation markets have been halted, further exacerbating Boeing's financial strain.

The news prompted a sharp decline in Boeing's stock, with shares falling as much as 6.7% in U.S. trading, marking the largest intraday drop in nearly four months. The company's troubles began following a near-catastrophic incident on a 737 Max 9 plane in January, which exposed significant quality and safety issues within Boeing's factories. This led to a series of consequences, including regulatory scrutiny, the departure of key executives, and a tarnished reputation.

Initially, West had expressed optimism that Boeing would generate a low single-digit billion-dollar free cash flow for the year, while also predicting an improvement in the second-quarter cash burn. However, due to China's request for additional documentation regarding certification of batteries in cockpit voice recorders, the company has been unable to deliver aircraft to the country. As a result, second-quarter deliveries are expected to be on par with the first quarter.

The setback with China is particularly detrimental, as Boeing just recently resumed deliveries after a five-year hiatus. The company sees the resumption of deliveries of the 737 Max to China as pivotal in generating cash flow and reducing its inventory of previously built aircraft, which has accumulated during the global grounding that began nearly five years ago and the subsequent Covid-19 pandemic.

Despite the challenges, West expressed confidence that Boeing's operational and financial performance would improve as the year progresses, with the third and fourth quarters representing a turning point. The company continues to work on addressing its issues, emphasizing the need for discipline in the long-term, cyclical nature of the business.

Furthermore, Boeing still expects to obtain certification for its 777X widebody model by 2025, despite concerns from some customers about potential further delays. The company also revealed part supply issues with its 787 model, specifically regarding heat exchangers and seats. However, these problems are not expected to impact the overall delivery schedule of the widebody model.

Boeing is actively pursuing reintegrating Spirit AeroSystems Holdings Inc., its crucial supplier, in the second quarter. The company is open to various financing options for the deal but intends to retain its investment-grade credit rating.

Boeing's cash burn in the first quarter led to a downgrade of its credit rating by Moody's Ratings, prompting the planemaker to raise $10 billion through a bond sale.

On May 30, the company is set to deliver a 90-day plan to the Federal Aviation Administration addressing shortcomings in manufacturing processes and safety culture. This plan aims to rectify quality control issues following the incident involving a door plug on a nearly-new 737 Max earlier this year. West emphasized that the plan is not the finishing line and highlighted Boeing's commitment to continued engagement with aviation regulators.

As Boeing confronts ongoing challenges, the company remains dedicated to long-term investments that will benefit not just itself but also its customers and the aviation industry as a whole.