Kelly Ortberg Talks About Hurdles Boeing Must Clear Before Launching New Commercial Jet — Says Customers Want BA To Focus On Existing Aircraft

• Ortberg said Boeing's priorities include improving its financial position and ensuring that the technology and markets are ready.
• SMBC Aviation Capital placed an order for 100 Boeing 737 MAX jets on Monday, including 60 737-10s and 40 737-8s.
• Ortberg added that the imminent certification of the 737 Max 7 is a critical milestone for the company.

Boeing Co. (BA) CEO Kelly Ortberg highlighted three hurdles the aerospace giant must clear before launching a new commercial jet.

During an interview with CNBC, Ortberg said that Boeing is currently focusing on “repairing its finances” instead of rushing to develop a successor to the 737 Max.

“Right now, the customers are telling me, 'focus on your existing product line'. We really want to see better maturity of the existing product line before we move to the next airplane, so it's a ways off,” he said.

Boeing shares were up more than 1% in Monday’s pre-market trade.

BA’s Three Hurdles

Ortberg said Boeing's priorities include improving its financial position and ensuring that the technology and markets are ready.

“First of all, we have to be ready, and part of that is getting our financial house in order, and we’re working on that. It’s going to take a couple more years to get where we want to be,” he said.

Boeing’s last major commercial jet launch was the 777X, which was introduced in 2013. Two years prior to that, the 737 Max was launched, but it ran into trouble with the regulators following two fatal crashes.

Meanwhile, Saudi Arabian carrier Riyadh Air announced on Monday that it will exercise options to buy 28 additional Boeing 787 Dreamliners, including 20 larger 787-10 jets, taking its firm order book to 67 aircraft once finalized.

SMBC Aviation Capital also placed an order for 100 Boeing 737 MAX jets on Monday, including 60 737-10s and 40 737-8s.

Ortberg Says 737 Max 7 Certification A Critical Milestone For BA

The Boeing CEO added that the imminent certification of the 737 Max 7 is a critical milestone for the company.

“It’s the first new airplane we’ve certified in a long time,” he said. “We’re done with the dash testing on the 7, and we expect certification here very shortly.”

Ortberg added that the 737 Max 10 certification will follow right after the Max 7, following which Boeing will introduce it in the market. He said that while the certifications will help Boeing, they’re a signal of the company’s attempt at regaining the trust of the Federal Aviation Administration (FAA).

“We’ve been working very, very hard to be more transparent and work collaboratively with the FAA and establish that trust so they allow us to sell these aircraft,” he added.

According to a Reuters report citing Deputy FAA Administrator Chris Rocheleau, the regulator is inching close to approving the 737 Max 7 and 10 certifications.

“I think the -7 is literally around ‌the ⁠corner, and -10 right behind it,” he said.

Rocheleau also expects that the Boeing 777x approval will happen after the two 737 Max aircraft.

BA To Spend More To Prevent Delays To Its Air Force One Program

Ortberg said that Boeing will spend more to ensure there are no delays in the Air Force One program, adding that it is on track for delivery in 2028.

“We’re going to provide some additional staffing, engineering and production staffing, and work multiple shifts to make sure we keep that airplane on schedule,” he said.

Ortberg also said this is the most complex twin-aisle aircraft the company has ever built, adding that Boeing is currently past the design phase.

What Retail Traders Think Of BA Stock

Retail sentiment on Stocktwits around Boeing trended in ‘bullish’ territory at the time of writing.

BA stock is down 1% year-to-date and 7% over the past 12 months. The S&P 500 ETF Trust (SPY) is up 18% over the past 12 months, while the Vanguard Total Stock Market Index Fund ETF (VTI) is up 19%.

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