NEW YORK: Boeing concluded a bruising 2020 yesterday with another unpleasant surprise: a $6.5 billion hit from delays to its new 777X plane that exacerbated its annual loss. The aerospace giant, which saw its revenues ravaged by the commercial airline downturn and a 20-month grounding of its 737 MAX model, now expects first deliveries in the widebody 777X in late 2023, compared with the earlier time-table of 2022.
The accounting for the 777X prolongation pushed Boeing’s fourth-quarter loss to $8.4 billion, plunging its tally for all of 2020 to $11.9 billion in the red. The past year “was a year of profound societal and global disruption which significantly constrained our industry,” said Chief Executive Dave Calhoun. “The deep impact of the pandemic on commercial air travel, coupled with the 737 MAX grounding, challenged our results. “I am proud of the resilience and dedication our global team demonstrated in this environment as we strengthened our safety processes, adapted to our market and supported our customers, suppliers, communities and each other.”
Boeing reported a fourth-quarter loss of $8.4 billion following the accounting of $6.5 billion. Revenues fell 14.6 percent to $15.3 billion. Boeing has now pushed back the 777X timeframe at least three times. When it delayed the program in 2020, Boeing said the prolongation reflected in part the need to incorporate lessons from the 737 MAX certification, as well as uncertainty about airline demand due to the downturn in travel from COVID-19. Boeing described similar dynamics yesterday.
While Boeing’s results over the last two years were weighed down by the MAX grounding, the outlook for that program has improved after commercial flights on the plane resumed in late 2020 following a lengthy grounding due to two fatal crashes. A full return in commercial plane travel is not expected until after 2021. Shares of Boeing tumbled 3.2 percent to $195.60 in pre-market trading.
Meanwhile, the European Union Aviation Safety Agency (EASA) said yesterday that it had cleared the Boeing 737 MAX to fly again in European skies, 22 months after the plane was grounded following two fatal crashes. “Following extensive analysis by EASA, we have determined that the 737 MAX can safely return to service,” EASA director Patrick Ky said in a statement.
“This assessment was carried out in full independence of Boeing or the (American) Federal Aviation Administration and without any economic or political pressure,” the agency added. The MAX was grounded in March 2019 after two crashes that together killed 346 people-the 2018 Lion Air disaster in Indonesia and an Ethiopian Airlines crash the following year.
Investigators said a main cause of both crashes was a faulty flight handling system known as the Maneuvering Characteristics Augmentation System, or MCAS. Meant to keep the plane from stalling as it ascends, the automated system instead forced the nose of the plane downward.
The findings plunged Boeing into crisis, with more than 650 orders for the 737 MAX cancelled since last year. The US Federal Aviation Administration (FAA) ordered Boeing to revamp the jet and implement new pilot training protocols, before finally approving the plane for a return to service in November. – AFP