737 Max grounding leads to first loss in decades

737 Max grounding leads to first loss in decades



The grounding of the Boeing 737 Max pummeled the airliner maker’s finances in 2019 as the company reported its first full-year loss in more than two decades.

For all of 2019, Boeing posted a loss of $636 million after turning a profit of $10.5 billion in 2018, primarily due to the 737 Max’s grounding following two deadly crashes.

For the fourth quarter, Boeing reported a net loss of $1 billion after recording a profit of $3.4 billion a year earlier.

It’s the company’s first full-year loss since 1997, according to financial database FactSet.

Boeing said Wednesday that its fourth-quarter revenue plunged 37% to $17.9 billion, while its full-year revenue fell 24% to $76.6 billion.

The company recorded a $2.6 billion charge for “estimated potential concessions and other considerations to customers related to the 737 Max grounding. It also reported an additional $2.6 billion in unexpected costs related to 737 airliner production and delivery.

Boeing also warned that the suspension of 737 Max production would introduce “abnormal production costs” of about $4 billion in the future, largely in 2020.

In this file photo, dozens of grounded Boeing 737 MAX airplanes crowd a parking area adjacent to Boeing Field in Seattle.

“We recognize we have a lot of work to do,” the company’s new CEO, David Calhoun, said in a statement. “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.”

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