World

Boeing reports its first loss in two decades

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Boeing has reported its first annual loss in more than two decades as the 737 Max crisis continues to hit the firm.

The planemaker was forced to ground the aircraft, which had been its best seller, in March last year after two deadly crashes that killed 346 people.

Now it has said that it expects the bill for the grounding to surpass $18bn (£13.8bn).

That has hurt the firm’s finances, pushing it to a $636m loss for 2019.

Sales were worse than expected in the final three months of last year when the planemaker booked $17.9bn in revenues.

That was much lower than $21.7bn that had been expected by analysts.

  • Boeing: US regulator ‘pleased’ with 737 progress
  • Boeing delays 737 Max return date to July

“We recognize we have a lot of work to do,” said Boeing’s newly-appointed boss David Calhoun.

He replaced Dennis Muilenburg who was fired late last year following his handling of the crisis at the company.

“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 Mr Calhoun. =

This combination of pictures created on December 23, 2019 shows a file photo taken on February 16, 2004 of the president of General Electoric (GE) Transportation, David Calhoun (L), and a file photo of Boeing CEO Dennis Muilenburg at a hearing in front of congressional lawmakers on Capitol Hill in Washington, DC on October 30, 2019

Analysis:

Samira Hussain, BBC business reporter, New York

This was not necessarily the best first earnings report for the newly appointed chief executive of Boeing. There were some eye-catching headlines: more than $18bn in costs associated with the Max crisis; it’s first loss in more than two decades; plummeting sales.

Boss Dan Calhoun’s primary focus is to first get the planes back in the air quickly and safely, making fixes, giving pilots extra training and convincing regulators.

But he also needs to re-establish broader confidence in Boeing planes – and that will be far more difficult. Yes, Boeing has been in communication with its airline customers about when the jets may be airworthy again.

But how do you convince the public that the aircraft responsible for 346 deaths, countless investigations and billions of dollars in fixes is safe to board

The cost of 737 Max crisis was thought to have reached around $9bn but Wednesday’s announcement suggests the final bill could be more than double that.

The return to service of the 737 Max has been repeatedly delayed. And last week, Boeing said it did not expect the fleet to return to the skies before the summer.

Boeing has been working on fixes to try to get the 737 Max planes back up and running.

And in an interview with CNBC, Mr Calhoun said he expected the firm would meet deadlines set by regulators.

Meanwhile, he said that – despite the two fatal crashes – he did not plan to rebrand the 737 Max.

The company had a total backlog in orders worth $464.4bn.

Boeing’s share price climbed on Wednesday, soaring by more than 4%.

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