737 Max grounding leads to first loss in decades

737 Max grounding leads to first loss in decades

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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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