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Boeing to detail quality, training improvements in FAA

Boeing to detail quality, training improvements in FAA

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Boeing to detail quality, training improvements in FAA

 Boeing’s outgoing CEO Dave Calhoun and other senior company officials will detail the planemaker’s quality, training and other improvements during meetings with U.S. aviation regulators on Thursday, according to sources with knowledge of the matter.

In late February, Federal Aviation Administration chief Mike Whitaker gave Boeing 90 days to develop a comprehensive plan to address “systemic quality-control issues” and barred the planemaker from expanding 737 MAX production after a door panel blowout during a Jan. 5 flight on a new Alaska Airlines (ALK.N), opens new tab 737 MAX 9.

Whitaker will hear firsthand from Boeing executives on quality efforts during a scheduled three-hour meeting at FAA headquarters in Washington that could go longer, according to the sources.

It will be Calhoun’s second high-profile meeting with Whitaker this year as Boeing seeks to have costly production limits lifted by the FAA after soaring quality concerns compelled the regulator to slow its rapidly increasing 737 production schedule.

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Boeing confirmed a meeting would take place on Thursday, but declined to provide further details. The FAA said Whitaker would take part in a meeting with Boeing.

Calhoun is due to exit the company by the end of the year as part of a broader management shake-up announced in the wake of the Alaska Airlines incident, but Boeing has not yet named a replacement.

The meeting is set to include other senior Boeing leaders including Stephanie Pope, the new head of Boeing Commercial Airplanes as well as Boeing’s head of quality Elizabeth Lund and Mike Fleming, Boeing’s senior vice president and general manager, of airplane programs, the sources said.

Scandinavian airline SAS on Thursday posted a second-quarter loss that more than doubled from a year earlier.

Boeing said this month it has added new training material for manufacturing and quality roles averaging about 20 to 50 more training hours per employee, while more than 7,000 new tools and equipment have been provided for commercial airplane work.

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“We anticipate the FAA will take whatever time is necessary to review that plan and hold us accountable,” Calhoun said at Boeing’s annual meeting on May 17. “This is more of a beginning than it is an end.”

Whitaker, who plans to hold a press conference after the meeting, said last week that Boeing faces a “long road” to address safety issues. He added the 90-day plan “is not the end of the process. It’s the beginning and it’s going to be a long road to get Boeing back to where they need to be making safe airplanes.”

Boeing is currently producing significantly fewer than the 38 737 MAXs per month it is permitted under the FAA directive.

A February meeting between Boeing executives and Whitaker lasted about seven hours.

Boeing faces a separate criminal investigation into the MAX 9 mid-air emergency. The Justice Department said this month that Boeing breached its obligations in a 2021 agreement shielding the planemaker from criminal prosecution over fatal 737 MAX crashes.

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Boeing denied it has breached the deal. The Justice Department directed Boeing to respond by June 13 and intends to decide whether to prosecute Boeing by July 7. 

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Alphabet to report double-digit Q2 growth

Alphabet to report double-digit Q2 growth

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Alphabet to report double-digit Q2 growth

 Google-parent Alphabet is expected to report a nearly 14% rise in quarterly revenue, its fourth straight quarter of double-digit growth, driven by steady demand for its artificial intelligence-powered cloud computing services and an uptick in the ad market.

The search giant’s second-quarter report on Tuesday, the first among the Big Technology companies this season, could offer further insight into the uptake of AI services, as well as the rising costs associated with the new technology.

At a developer conference in May, Google widely rolled out AI-powered summaries in Search and beefed up its Gemini AI model to better compete with services from OpenAI and

Google is also launching new Pixel devices with AI capabilities next month, moving forward its unveiling event, typically set in the fall, after Apple announced in June a slew of AI capabilities and an integration with ChatGPT in the latest iPhones.

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“Investors will be looking for continued success in Search, but also for signs of the company adapting to the new world of AI,” said Gil Luria, senior software analyst at D.A. Davidson & Co.

“The company will need to show that AI is driving Google Cloud growth, that there are no share losses in Search as users start leaning more on AI chat, and that the new models being built are competitive.”

Alphabet’s AI investments will also be closely watched. In the January-March period, the company’s capital expenditure jumped 91% to $12 billion, rattling some investors even though CEO Sundar Pichai assured that the AI integrations were boosting demand for its cloud and search businesses.

Nvidia is working on a new version of its flagship AI chips that is meant to avoid U.S. restrictions on sales to China.

The company’s operating expenses in the second quarter ended June likely rose more than 32% to $27.57 billion, according to LSEG data, the highest jump in over two years.

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Investors will also have questions around reports that Alphabet is in talks to buy cybersecurity startup Wiz for roughly $23 billion and how that would affect its bottomline.

Alphabet’s core businesses are likely to report healthy growth as an improving macro-economic climate gives customers the confidence to invest in cloud computing and spend on advertising.

“Google search spending still held up fairly well … we think advertisers need to spend as a key offset to inflation,” said RBC Capital Markets analyst Brad Erickson.

Media investment firm GroupM raised its 2024 global advertising growth forecast to 7.8% in June, from 5.3% in December, primarily on account of better-than-expected spending in China and the United States.

Analysts also expect strong performance at YouTube, thanks in part to expanded monetization features in its TikTok-styled video offering, Shorts.

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Alphabet’s second-quarter cloud computing sales and advertising revenue are expected to grow 26.4% and 10.8%, respectively, according to LSEG data, largely similar to the preceding two quarters.

Ad-dependent peer Meta Platforms will report its results next week on Wednesday, July 31. 

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Delta cancels another 600 flights on Monday in wake of cyber outage

Delta cancels another 600 flights on Monday in wake of cyber outage

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Delta cancels another 600 flights on Monday in wake of cyber outage

Delta Air Lines canceled more than 600 flights on Monday, as the U.S. air carrier continued to struggle to restore operations after last week’s global cyber outage, even as other airlines were recovering from the incident.

About 16% of Delta’s flights had been canceled as of 7:00 a.m. EST, according to data from FlightAware, out of roughly 1,100 flights to or from the United States overall, the website said.

The issue has stranded thousands of Delta travelers across the United States, with some having to rent cars to drive hundreds of miles while others could have to wait days for new flights or cancel trips altogether.

The Atlanta-based airline is battling operational issues after the outage hit its crew tracking system. Delta’s total number of canceled flights since Friday has exceeded 5,000.

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A Delta spokesperson did not immediately respond to an emailed request for comment.

A software update by global cybersecurity firm CrowdStrike triggered system problems for Microsoft customers, including many airlines, on Friday.

Although other U.S. airlines have largely recovered, Delta has struggled to return to normal. American Airlines had called off 1% of its flights on Monday, while United Airlines canceled less than 1%.

Delta shares were little changed in premarket trading on Monday.

Nvidia is working on a new version of its flagship AI chips that is meant to avoid U.S. restrictions on sales to China.

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Delta CEO Ed Bastian said over the weekend that the CrowdStrike issue affected its Microsoft Windows systems, snarling a critical application.

“One of our crew tracking-related tools was affected and unable to effectively process the unprecedented number of changes triggered by the system shutdown,” Bastian told customers in an email.

In a separate note, he told employees that Delta would continue to “tactically adjust” schedules to ensure safety.

Transportation Secretary Pete Buttigieg spoke with Bastian over the weekend, according to an official, reminding him of the carrier’s responsibilities to customers and the department’s enforcement role.

CrowdStrike said a significant number of the 8.5 million affected Microsoft devices were back online. 

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CrowdStrike shares set to extend losses as outage effects linger

CrowdStrike shares set to extend losses as outage effects linger

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Shares of CrowdStrike fell 5% in premarket trading on Monday, extending their streak of losses, after several analysts downgraded the stock on concerns over the financial fallout from the global cyber outage last week.

CrowdStrike’s glitchy update to its security software affected computers powered by Microsoft’s Windows operating system, disrupting internet services across the globe and leaving people without access to banking or healthcare services.

Microsoft said on Saturday that about 8.5 million Windows devices, or less than 1% of all Windows machines, were affected.

Services across industries gradually came back online later on Friday but companies were dealing with backlogs, delays, canceled flights and other issues, raising questions on how to avoid such a situation in the future and whether such critical software should remain in the hands of a few companies.

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CrowdStrike will likely face resistance in signing new deals in the near term as a result of the anticipated fallout from the quality assurance issue which caused the massive tech outage, Guggenheim analysts said on Sunday.

“While the outage could remain a near-term overhang, we believe CrowdStrike will emerge as a stronger company as this was not a breach, but rather a significant breakdown in process,” RBC Capital Markets analysts said.

At least six brokerages have cut their price targets on CrowdStrike, with two more downgrading the stock’s rating to “neutral” from “buy”.

The outage triggered an 11% drop in CrowdStrike’s shares on Friday.

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