Boeing to delay 777X again as it posts record annual loss.
Boeing disclosed Wednesday that it took a hefty $6.5 billion charge for its new 777X jetliner, while posting a record annual loss due to the coronavirus pandemic and the aftermath of a safety crisis on its 737 MAX.
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The coronavirus crisis has exacerbated the drop in demand for the industry’s largest aircraft, with airline customers refusing aircraft deliveries due to international travel restrictions, hurting the U.S. plane maker’s cash flow.
The manufacturer disclosed $8.3 billion in operating charges, including a $468 million charge for 737 production costs, $275 million for production problems with the KC-46 refueling tanker and $744 million related to its 737 MAX settlement with the U.S. Department of Justice over a fraud conspiracy charge.
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The company’s net loss increased to $8.44 billion in the fourth quarter ended Dec. 31, up from $1.01 billion a year earlier, bringing its full-year loss to a record $11.94 billion.
Boeing also indicated that it now expects the 777X to enter service by the end of 2023, delaying the aircraft’s entry for the third time, due to stricter certification requirements following the 737 MAX safety crisis and falling demand, Reuters reviewed.
“2020 was a year of profound social and global disruptions that significantly constrained our industry,” Boeing CEO Dave Calhoun said in a statement accompanying the results.
The historic slump in air travel and widening inspections over production defects halted deliveries of dozens of 787s to airlines, cutting off a key source of cash just as Boeing works to clear an inventory of about 450 737 MAX airplanes.
Boeing said it expects to resume 787 deliveries to customers sometime in 2021, although deliveries were not expected to regain 2019 levels until at least 2024, analysts said.
The U.S. manufacturer reaffirmed plans to reach a sharply reduced production pace of five 787s per month in March, when it will consolidate production at its South Carolina factory. It also indicated that it maintains plans to reach a production pace of 31 737s per month by early 2022.
By Eric M. Johnson, Ankit Ajmera.
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