Spirit AeroSystems hiked deliveries of aircraft structures in 2023 but still lost $633 million as it continues seeking to right money-losing programmes and address quality concerns.
“Over the past month, we have been working shoulder to shoulder with our customer to take a series of actions to strengthen our systems and processes to accelerate the improvement of our operations,” Spirit chief executive Pat Shanahan says on 6 February. ”The quality and safety of the products we produce is paramount above all.”
Spirit’s top customer, Boeing, disclosed on 4 February it had found non-conformances” in the fuselages of 50 undelivered 737 Max. Spirit supplies 737 fuselages. The issue – the latest in a string of 737 quality problems – involved mis-drilled rivet holes and will force Boeing to delay more 737 Max deliveries, Boeing Commercial Airplanes CEO Stan Deal said.
Spirit’s $633 million 2023 loss compares to its loss of $546 million in 2022. But the company did report a solid bump in 2023 revenue, which was up 20% in one year to $6 billion.
That increase aligns with more deliveries by Spirit of aircraft structures. The company delivered structures for 1,418 aircraft, including for 356 737s, in 2023, up 9% from 1,297 – including structures for 281 737s – in 2022. Spirit delivered 104 737 fuselages to Boeing in the fourth quarter, or an average of 34 monthly.
The company’s commercial aircraft business turned a $49 million operating profit in 2023, compared to an $83 million operating loss in 2022.
Spirit has been hammered in recent quarters not only by 737 issues but also by struggles with its other aircraft programmes. Shanahan, who become CEO in October last year, specifically called out Spirit’s composite structures manufacturing as being more difficult than expected.
Spirit on 6 February did not disclose financial guidance for 2024, citing the Federal Aviation Administration’s decisions, following a 5 January 737 Max 9 door-plug failure, to prohibit further 737 Max production rate increases.
“The [fourth-quarter result] highlights the considerable amount that remains to be done, rather than progress since the [third-quarter] report,” says a 6 February analyst note from JPMorgan.
Spirit swing to a $58.8 million profit in the fourth quarter, compared to a $244 million loss in the same period of 2022. That profit partly reflects a reversal by Spirit of previously recorded forward losses on its 787 work. Spirit reversed the losses after reaching a revised financial and production agreement with Boeing.
It has also been seeking a new agreement with Airbus but has not disclosed progress toward that goal.
