Boeing Co. posted its largest-ever quarterly loss on Wednesday due to the spiraling cost of resolving issues with its 737 MAX, warning it may have to shut production of the grounded jet completely if it runs into new hurdles with global regulators getting its best-selling aircraft back in the air, Reuters reports.
Boeing chief executive Dennis Muilenburg said he was confident the MAX would be back in service as early as October, but acknowledged for the first time that Boeing may have to slow or completely halt production of the 737 MAX, a step it has not had to resort to on any commercial plane for more than 20 years.
The world’s largest planemaker also reported a fresh delay on its 777X widebody program as General Electric Co. engine problems pushed the first flight into 2020.
Boeing is looking to restore customers’ faith in its 737 MAX and to satisfy the requirements of regulators by reprogramming the software pinpointed as a common factor in two deadly crashes in the span of five months.
“This is a defining moment for Boeing,” Muilenburg told analysts. He said Boeing has held weekly technical calls and a number of conferences with MAX operators around the world and nearly 225 sessions in flight simulators testing its software.
Muilenburg’s comments came after the company posted its largest-ever quarterly loss, diving nearly US$3 billion into the red while burning US$1.01 billion in cash in the quarter.
Investors shrugged off the large loss after Boeing announced heavy charges last week, bringing the total cost so far of the 737 MAX crisis to more than US$8 billion, mainly due to compensation the planemaker will have to pay airlines for the delayed deliveries and lower production.
Boeing’s shares dipped only slightly after second-quarter results were announced, but slipped 3 percent after Muilenburg’s comments on the possibility of lowering production further, or stopping it temporarily.
Chicago-based Boeing has been unable to deliver any 737 MAX aircraft since the single-aisle plane was grounded worldwide in March after two fatal crashes in Indonesia and Ethiopia killed 346 people.
Net loss for the second quarter was US$2.94 billion, compared with a profit of US$2.20 billion a year earlier.
Sales slipped 35 percent to US$15.75 billion and also came in below the average estimate of US$18.55 billion, according to Refinitiv data.
Global airlines have had to cancel thousands of flights and use spare aircraft to cover routes that were previously flown with the fuel-efficient MAX, eating into their profitability.
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