*

Boeing ( BA ) deliveries won't increase in second quarter, CFO

says

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Shares fall 6% on news of negative 2024 cash flow

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Deal with Spirit Aero in Q2 still possible, CFO says

(Adds CFO comments on deal talks in paragraphs 12, 13, updates

share price, adds bullet points)

By Allison Lampert

May 23 (Reuters) - Boeing ( BA ) will burn rather than

generate cash in 2024 and deliveries will not increase in the

second quarter, the company's finance chief said Thursday, as

the U.S. planemaker grapples with a full-blown crisis that is

pinching production of its strongest-selling aircraft.

CFO Brian West told the Wolfe Research Global Transportation

and Industrials Conference that he expects Boeing's ( BA ) full-year

free cash flow to be negative, compared with March's outlook for

positive cash generation in the low single-digit billions.

Boeing's ( BA ) jet production has slowed dramatically in the face

of increased scrutiny from regulators, airlines and lawmakers

following a January incident when a door plug blew off an Alaska

Airlines jetliner while in mid-air.

Commercial jet deliveries won't step up in the second

quarter compared with the first three months of the year, West

said, adding that "we have frustrated and disappointed"

customers due to the supply chain and production issues.

"If you're on the inside you're seeing progress," West said,

but also said "everyone wishes it would go faster."

Boeing ( BA ) shares sank 6% on Thursday. Coming into the day's

trading, Boeing ( BA ) stock was down 30% this year.

Boeing 737 MAX jetliner production fell as low as single

digits in April, Reuters reported, well below the U.S. Federal

Aviation Administration cap of 38 jets a month as workers slow

the assembly line outside Seattle to complete outstanding work.

The Alaska Airlines incident, which occurred on a new

jetliner, prompted U.S. aviation regulators to curb the

company's production levels until Boeing ( BA ) starts to address

safety issues. The company is overhauling its manufacturing

practices and it is also searching for a new chief executive

after current CEO Dave Calhoun agreed to leave by year-end.

Top U.S. enforcement officials are also weighing whether to

charge the company for violating an agreement that shielded it

from prosecution stemming from previous jet crashes in 2018 and

2019.

The FAA has imposed a May 30th deadline for the planemaker

to hand over a 90-day report that would address "systemic

quality-control issues." FAA Administrator Mike Whitaker said

Thursday that Boeing ( BA ) faces a "long road" to address safety

issues.

Separately, the U.S. Justice Department intends to decide by

July 7 whether to prosecute Boeing ( BA ) after determining the

planemaker breached its obligations in a 2021 agreement that

shielded it from criminal prosecution over fatal 737 MAX crashes

in 2018 and 2019.

Boeing ( BA ) is currently in negotiations to acquire 737 MAX

fuselage supplier Spirit AeroSystems. West said a Spirit deal is

possible in the second quarter, but the deal is large and

complex, and should not be rushed.

Boeing ( BA ) spun off Spirit in 2005, and the company now derives

a portion of its revenue from Boeing ( BA ) rival Airbus, which wants

compensation for taking on some of Spirit's operations.

West also confirmed a Wednesday Reuters report that said

plane deliveries to China were delayed in recent weeks due to a

Chinese regulatory review of batteries powering the cockpit

voice recorder. The delay will have an effect on free cash in

the second quarter, West said.

The U.S. planemaker said in a statement on Wednesday it is

working with Chinese customers on the timing of their deliveries

as the Civil Aviation Administration of China completes its

review of batteries contained within the 25-hour cockpit voice

recorder.