Boeing posted its first annual loss in more than two decades on Wednesday (29 January) amid the ongoing crisis over its grounded 737 Max aircraft.
The company recorded a loss in operational earnings of $636 million last year, down from a $10.5 billion profit in 2018, with costs arising from the Max grounding spiralling to nearly $19 billion – more than double Boeing’s initial estimate.
Boeing’s commercial aircraft division lost $6.7 billion last year, and the manufacturer has earmarked another $2.6 billion to further compensate airline customers for the ongoing grounding.
Meanwhile, Boeing also recorded a $2.6 billion increase in production costs relating to the Max last year, and expects a further $4 billion hit from “abnormal production costs”.
In total, Boeing estimates the costs associated with the 737 Max situation will run to nearly $19 billion. “[Our] financial results continue to be significantly impacted by the 737 MAX grounding,” said Boeing in a trading update.
New president and chief executive David Calhoun, who replaced Dennis Muilenburg shortly before Christmas, said Boeing recognised it had “a lot of work to do”. “We are focused on returning the 737 Max to service safely and restoring the long-standing trust that the Boeing brand represents with the flying public,” said Calhoun.
“Safety will underwrite every decision, every action and every step we take as we move forward. Fortunately, the strength of our overall Boeing portfolio of businesses provides the financial liquidity to follow a thorough and disciplined recovery process.”