Spirit AeroSystems, a key supplier in the aerospace industry, is grappling with severe financial challenges that threaten its operational continuity, as revealed in its latest financial disclosures. The Wichita-based company, renowned for manufacturing critical components like fuselages for Boeing’s 737 aircraft and parts for Airbus models such as the A220 and A350, reported a staggering $631 million loss in the fourth quarter of 2024. This figure significantly overshot its earlier forecast of a $413 million deficit for the period, pushing its full-year loss for 2024 to $2.1 billion. With cash reserves dwindling to $537 million by the end of 2024, Spirit has sounded the alarm, stating it will require additional funding to sustain operations amid persistent operating losses projected into the foreseeable future.
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The company’s financial woes stem from a confluence of factors that have battered its bottom line over recent years. Boeing, Spirit’s largest customer, has faced its own production hurdles, including a nearly three-month halt in 737 production in late 2024 due to a machinists’ strike. This slowdown directly impacted Spirit, as Boeing reduced fuselage deliveries to address quality defects, a lingering issue that has plagued both companies. Additionally, Boeing’s implementation of stricter production and delivery processes earlier in 2024—such as refusing parts requiring rework—further strained Spirit’s cash flow by delaying shipments and invoicing. Meanwhile, Spirit’s work for Airbus has been a persistent source of financial hemorrhage, with the lack of price increases on programs like the A220 and A350 failing to offset rising production costs. These challenges have compounded over time, with Spirit recording operating losses of $577 million in the fourth quarter alone, excluding interest and other adjustments.
Despite these setbacks, Spirit has taken steps to mitigate its liquidity crisis. In 2024, it secured critical cash infusions from its two primary customers: Boeing provided up to $350 million in advance payments, with $200 million disbursed by year-end, while Airbus offered a $107 million interest-free line of credit, of which $70 million was drawn. These funds have provided essential breathing room, boosting Spirit’s cash position from a precarious $218 million in September to $537 million by December. However, the company acknowledges that this is a temporary lifeline. Its ability to secure further funding hinges on several uncertain variables, including ramping up 737 fuselage production to meet Boeing’s targets, successfully closing its planned acquisition by Boeing in mid-2025, and negotiating repayment terms for existing customer advances. Spirit has also hinted at additional strategies, such as potential asset sales or operational restructuring, though it cautions there is no guarantee these efforts will suffice.
On a positive note, Spirit demonstrated operational resilience in the fourth quarter, delivering components for 457 aircraft—a notable increase from 398 in the same period of 2023. This uptick reflects progress in addressing quality issues and accelerating production, particularly on the 737 program, where deliveries doubled compared to the prior quarter. Yet, these gains have not stemmed the financial bleeding. With $4.4 billion in debt, including $426 million due short-term, and a projected cash burn of $450 to $500 million through mid-2025, Spirit’s leadership is racing against time. The company’s fate is closely tied to Boeing’s recovery and the broader aerospace supply chain’s stability, making its plea for additional funding a critical test of its survival—and a pivotal moment for the industry.