Aircraft manufacturer Boeing forecasts a massive drain in cashflows in 1Q 2024, with outflow to reach between USD 4 bn and USD 4.5 bn due to slower output of its 737 Max jetliner and regulatory investigations, Bloomberg reports, citing comments made by Boeing CFO Brian West at a London conference yesterday. West expects margins for Boeing’s commercial aircraft business to drop about 20% in 1Q, the company’s worst performance since late 2021. The US Federal Aviation Administration (FAA) grounded over 170 Boeing 737 Max 9s after an Alaska Airlines flight operating the aircraft was forced to make an emergency landing in early January after a panel flew off mid-flight. The cashflow drain offsets Boeing's plans to reach a USD 10 bn cash flow target by 2025-26, the newswire explains.

When it rains, it pours: Boeing will also slow 737 production to less than 38 aircrafts per month, Reuters reports, citing comments by West. The aircraft manufacturer is capped at producing this number by an FAA enforced limit. "For years, we prioritized the movement of the airplane through the factory over getting it done right, and that's got to change,” West said at a Bank of America conference.

The lead up to the March and April contract season — when shippers and ocean carriers meet to negotiate one-year freight contracts — is turning into a “waiting game,”CNBC reports. Carriers were keen to ink contracts and benefit from the record USD 2.5k spread between spot and contract rates, but spot rates have declined for their sixth week in a row on the back of Red Sea disruptions. This rapid decline has seen shippers hold off on closing contracts, as they anticipate continued declines in spot rates and a closing in the spread, CNBC explained.

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