Challenges and achievements

By now you’ve read about our 4th quarter and full year 2009 results.

We’ve discussed here many times the challenges we faced over the past year. So I’m not going to tell you it was a totally successful year, from our point of view. But when you consider how we ended the year vs. how it began, no question in many ways Boeing had a good year.

In other words, I think we ended up in better shape than we might have anticipated one year ago – when we faced an unprecedented market environment. After a lot of turbulence, we finished the year maybe even with a bit of a tail wind.

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ZA002, the second Dreamliner, during flight testing over the snow-capped peaks of the Pacific Northwest.

In terms of financial results, those speak for themselves. The earnings for the quarter and full-year reflect the development program impacts we’ve talked about before. However in one sense we had a record year, with revenue of $68.3 billion, which is up 12% from a year ago. That’s a solid performance.

So despite huge challenges, we also made tremendous progress. The Dreamliner is flying, and the first flight of the 747-8 is approaching. 2010 is going to be about successful flight test programs and first deliveries for both airplanes late in the year.

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Two of the flight test 747-8 freighters are on the flight line in Everett as first flight nears.

Among the big stories of 2009 were our selection of North Charleston, South Carolina as the location for a second final assembly site for the 787, and the acquisition of sole ownership of Global Aeronautica. With our operations there now integrated, it will mean increased productivity for the 787 program and long-term competitiveness for Boeing.

News of two big orders came at the end of the year: United Airlines’ selection of the 787 and Korean Air becoming the first Asian airline to order the 747-8 Intercontinental. Assembly of the passenger version of the 747-8 is set to begin mid-year 2010.

We saw the most-ever deliveries of both Next-Generation 737s and 777s, and we saw the entry into service of the 777 Freighter.

The 767 program continues to win orders and to deliver to our customers. This year the program reached a great milestone – 15 million flight cycles.

Commercial Aviation Services marked a number of milestones, including the opening of a new two-bay hangar at Shanghai Pudong Airport for Boeing Shanghai Aviation Services as well as an agreement with China Cargo Airlines, making them the first airline in China to operate the Airplane Health Management (AHM) and Electronic Flight Bag (EFB) combination.

Looking ahead, our 2010 delivery guidance is a little lower than 2009. We expect to deliver between 460 and 465 airplanes. This figure is a reflection of anticipated fewer twin-aisle deliveries this year, but does include the first 787s and 747-8s.

As was summed up in our earnings call today, the global recession has most definitely affected our airline customers – with reduced air traffic growth and resulting capacity reductions. We think that ultimately traffic is going to come back, but it’s still going to take time for all of the other economic indicators that affect our industry to rebound significantly.

Comments (4)

J Evans (Coral Springs, FL USA):

Randy,

Thank-you for the updates!!

Has Boeing set a date yet for the first 747-8 flight? Also, will you be doing a web cast like you did for the 787? The web casts give a more complete picture of what is going on than the news coverage from CNN or Fox.

Norman (Long Beach, California, United States):

Times are tough and times will be tough for the near future but progress is being made every day and the new orders for the 747-8 by Korean Air and the recent order for the 787 by United Airlines show the faith of the industry and more importantly the flyers have in the newest generation of Boeing products even with the delays of the 747 and the 787 last year.

Last year was not all in disappointment as the 777 freighter entered revenue service and the 787 after a long series of repairs and fixes made its first flight but this year will be better as the new 747 makes its first flight and the 787 will enter service by the end of the year.

Congratulations to all the Boeing employees on the floor and in the offices for a job well done and I can't wait to see the year progress with the 747-8 and the 787.

Paulo M (Johannesburg, RSA):

The report speaks highly of the management of the company. It's a pretty good report.

I'm looking forward to the flight test program of the 747-8F, I think the language in the web cast highlights encouraging expectations there. Good luck.

Angel (Murcia (Spain)):

Thanks for update, Randy

Really are greats news and results, in hard economic moments.

I'm confident in recovery, and better year 2010.

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