Boeing posted a $2.9 billion loss for the three months through June after the grounding of its best-selling 737 MAX halted deliveries and the plane-maker booked a $4.9 billion charge to cover concessions to airlines hurt by the delays.
The loss of $5.21 a share compared with profit of $2.2 billion, or $3.73 a share, a year earlier, the Chicago-based company said in a statement.
“This is a defining moment for Boeing, and we remain focused on our enduring values of safety, quality and integrity in all that we do, as we work to safely return the 737 MAX to service,” said CEO Dennis Muilenburg.
Earlier this month, Boeing lost a $5.9 billion order for the jetliners to its largest competitor, Airbus. The cancellation by flyadeal, the budget carrier that Saudi Arabian airline Saudia introduced two years ago, added to the mounting costs from regulators sidelining the MAX after two overseas crashes killed 346 people. The planemaker has spent the four months since developing and testing a patch to modify anti-stall software linked to the disasters.
U.S. airlines that flew the jetliner have had to alter their schedules throughout the busy summer travel season, while Boeing was forced to cut production from this year’s goal of 57 a month to 42 as customers stopped accepting deliveries until they could use the plane. Fewer shipments, which is when Boeing receives the bulk of payment from buyers, and higher costs to store completed aircraft, have also curbed Boeing’s cash flow.
Boeing has pledged $100 million to help families and communities of the passengers who were killed in the two MAX crashes. The money, to be paid over several years, will help with hardship and living expenses for surviving relatives as well as economic development in regions affected by the disasters, which occurred in Indonesia in October and Ethiopia in March.
The discovery of issues with the anti-stall software – which attempted to lower the planes’ angle of ascent during takeoff because of erroneous sensor data, leaving the aircraft working against the pilot – tarnished Boeing’s reputation, leading to heightened scrutiny of the Federal Aviation Administration’s initial approval of the 737 MAX for commercial flights.
Boeing sank 2.4% to $364.30 in New York trading on Wednesday, widening its decline so far this year to 13%. Airbus, its top rival in a global duopoly for commercial airplanes, gained 57% in the same period, while the broader S&P 500 jumped 20%.
Still, Boeing delivered 90 commercial aircraft during the quarter, including 42 of its twin-aisle, composite plastic 787 Dreamliners. Sales in the defense business climbed 11% to $4.54 billion as the company captured orders for its KC-767A tanker from the Italian Air Force and the AH-64 Apache attack helicopter from the U.S. Army.
