Boeing has hit historic turbulence, its quarterly earnings report reveals its first annual loss in 20 years, down $636 million for the year in 2019.
In the last quarter of 2019, the company saw a 37 percent drop in revenue from the year before. Its dramatic reversal of fortunes began with the grounding of its 737 MAX model in March of 2019 following two place crashes and loss of 346 souls.
The Boeing CEO David Calhoun said, “We recognize 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.”
That looks like long and painful process. Boeing has temporarily halted production of the entire MAX fleet while continuing software upgrades to convince regulators and airlines that it is safe to fly. The crisis is now expected to cross the loss of $19 billion, more than double its previous estimates.
The plane maker says it will pay out $8.3 billion to airlines due to unfulfilled orders, and will also have to absorb an extra $6.3 billion over the production cycle of the max plane, as well as $4 billion of abnormal production cost in 2020. That includes its employees keeping them on the payroll, even as the factory temporarily closes doors, and the cost of getting going again.
But, there was a welcome bit of news for Boeing earlier this week as its 777 line took to the skies for the first time. Due to enter service in 2021, it will be the world’s largest twin-engine jetliner.