Boeing plunges into red following 737 Max grounding

Boeing plunged to its first annual loss in more than two decades as it suffered the fallout from the global grounding of the 737 Max.

The US manufacturer put the cost of the two 737 Max crashes in Indonesia and Ethiopia which killed a total of 346 people at almost $19 billion.

The company lost $636 million last year against a profit of $10.4 billion in 2018.

Boeing earmarked $8.3 billion to compensate airlines following the grounding of the 737 Max last March, $6.3 billion in additional Max production costs and $4 billion in “abnormal” costs due to suspending production of the aircraft to give a total of $18.6 billion.

The firm admitted that financial results continue to be “significantly impacted” by the 737 Max grounding.

No fresh indication of when regulators will allow the 737 Max to return to service was given, although Boeing previously said this is not expected before the summer.      

The number of commercial aircraft delivered in the final quarter of 2019 fell to 79 from 238 the previous year. Total deliveries for 2019 were down by 53% to 380 aircraft.

Newly-installed Boeing president and chief executive David Calhoun said: “We recognise we have 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.

“We are committed to transparency and excellence in everything we do. 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.”

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