The aircraft manufacturer Boeing has announced that it expects to record billions in losses in the coming months and does not anticipate a positive cash flow for the entire year. This signals that the company is struggling to manage the financial impact of production and supply chain issues.

After a nearly $4 billion burden in the first quarter, Finance Chief Brian West warned investors on Thursday that the company must also expect a similarly large or even larger cash shortfall in the current quarter.

Boeing's shares fell by more than 7% on Thursday. Since the beginning of the year, the stock has lost around a third of its value, thus erasing more than 50 billion dollars in market capitalization.

West informed investors that Boeing is unlikely to generate positive cash flow throughout the year as the company struggles with a slowdown in aircraft production. This represents a significantly more pessimistic forecast than just a month ago when Boeing expected to reduce cash burn this quarter and end the year 2024 with a positive cash flow.

"We have frustrated and disappointed our customers due to some production and supply chain issues," West said at an industry and transportation conference in New York. He added that Boeing should start generating cash again in the second half of the year.

Boeing Struggles with Slower Production of its Bestseller 737 MAX as the Company Must Address Quality Issues Following the Near Disaster of an Alaska Airlines Flight in January. These Problems Have Prompted Increased Regulatory Scrutiny and a Management Restructuring.

West said on Thursday that deliveries of the 737 will continue to be well below the company's target of 38 aircraft per month until June. Boeing delivered 65 of these aircraft in the first quarter and is on track for a similar number in the second quarter. Production is expected to pick up later in the year.

"We must not overburden the factory or the system too much because the yield, if we do it right, will be great beyond 2025," said West.

In addition to production issues, there are a number of independent problems that are slowing down production and preventing Boeing from delivering already-built airplanes. These include a shortage of parts and the recent revelation that employees may have skipped inspections and falsified inspection records on 787 Dreamliners. According to analysts, Boeing has not produced any new 787s this month, and dozens of these airplanes are waiting outside the factory in North Charleston, South Carolina, for delivery.

The company's monthly aircraft deliveries reached their lowest point in April since the beginning of the pandemic, as the decline in air traffic almost brought aircraft production to a halt.

The Latest Issue: China Temporarily Suspended Acceptance of MAX 8 Jets This Week to Check the Batteries of the 25-Hour Cockpit Voice Recorders Onboard the Aircraft. U.S. and Chinese Regulatory Authorities Are Discussing the Matter, and Boeing Announced on Wednesday That It Will Leave the Decision to the Authorities.

The company said that the Federal Aviation Administration and European regulatory authorities have approved the system that meets the requirements of some non-U.S. aviation security authorities, that voice recorders record 25 hours of audio instead of two.

By the end of 2023, Boeing had 85 MAX jets in stock intended for China and has delivered 22 so far this year. Deliveries were resumed after a years-long freeze by Beijing following two fatal crashes of the 737 MAX 8 model.

Last month, Boeing raised 10 billion dollars in the debt market as investors worried about the company's liquidity. At the end of March, the company had 7.5 billion dollars in cash and investments, less than half of what it had at the beginning of the year.

In April, Moody's Investors Service downgraded its rating of Boeing's unsecured debt by one notch to Baa3, the lowest investment-grade level. Moody's expects that the cash flow pressure will continue until 2026.

Boeing has announced that it is in talks to acquire Spirit AeroSystems, which produces fuselages for the 737, to improve quality. West said the company is optimistic about reaching an agreement with Spirit by the end of June. The talks have been protracted due to negotiations with rival Airbus over control of Spirit factories that produce parts for Airbus aircraft.