Chicago-based Boeing revealed its largest-ever quarterly loss on Wednesday, approximates around $3 billion as it has to cope up with the ongoing grounding of its best-selling Boeing-737 MAX.
The world’s largest commercial jet maker also reported a delay in debut flight of its 777-X wide-body aircraft. An issue with the General Electric’s GE9X engine that will provide thrust to Boeing 777X is the reason that aircraft’s first flight is delayed until 2020.
Boeing’s Chief Executive Dennis Muilenburg announced during a conference call after reporting quarterly results that the company could consider further 737 production cuts as the MAX crisis are still rising.
Boeing has been failed in delivering any 737 MAX aircraft since the twinjet, single-aisle plane was grounded worldwide in March after two fatal crashes.
The crash of Ethiopian Airlines’ flight ET-302 in March was the second fatal accident of a 737 Max in the time frame of five months, killing all 157 people on board. A near-identical aircraft, operated by the Indonesian Lion Air, crashed in the sea shortly after takeoff from Jakarta in October 2018 in which All 189 passengers and crew members died. Last week Boeing announced that it would give $100m to help families of those who lost their loved ones in said crashes. Crash investigators have focused their efforts on the aircraft’s control system and Boeing has been working to roll out a software upgrade.
The total loss so far due to 737 MAX crisis now exceeds $8 billion after Boeing revealed a $4.9 billion levy last week that includes compensation by the planemaker, it has to pay airlines for the delay in deliveries.
The second-quarter loss is Boeing’s biggest ever in history, according to company records. Visit the site below to view a graphical representation of earnings:
Boeing posts worst quarterly loss ever
“This is a defining moment for Boeing,” Muilenburg told analysts, adding that the company has arranged weekly technical calls and a number of conferences with MAX operating airlines around the globe.
Boeing reduced the quantity of MAX aircraft it manufactures monthly from 52 to 42 after the second crash in Ethiopia while putting halt to further deliveries of the aircraft to airliners, cutting down a significant source of earning and shooting boundaries.
The lower production rate means Boeing has to spend extra dollars to pay for parts, which are priced, directly depending on the quantity that Boeing buys. Boeing said it is working towards producing 57 737s a month in 2020.
Boeing has a long way to go, in order to clear its image in the aviation industry and cover its losses, as well as more focus on delay of the 777X, due to the engine problems announced last month.