Boeing lost money for the first time since 1997 in the wake of the 737 MAX crisis, the company reported today. Against a profit of $10.5 billion in 2018, Boeing says that it lost $636 million in 2019 as it looked for outside funding to help it weather the storm. Earlier this week, the company sought and received more than $12 billion in financing commitments; earlier, it had signaled that it was looking for $10 billion in assistance. All told, Boeing reported a loss of $2.33 per share on revenues that had fallen 37 percent from the previous year.
The $18 billion loss from the MAX grounding and production stop is more than double what Boeing had predicted just three months ago, with some of that coming from a protracted recertification period and some from the costs it will incur restarting the MAX production line, an estimated $4 billion. (And that does not take into account the hardships faced by the myriad companies in Boeing’s supply chain.) Some $2.6 billion, in the last quarter alone, of the $18 billion write-down goes to compensating customers for the downstream effects of the grounding. The current thinking is that the jet will be restored to service sometime midyear.
Boeing delivered just 380 aircraft in 2019, down from 806 last year and a stark contrast to the expectation that it would produce nearly 900 in 2019. At the same time, Airbus clearly benefited from Boeing’s troubles, delivering a record 863 aircraft last year.
Boeing stock rebounded slightly on the quarterly report after suffering its deepest decline since the MAX grounding last March earlier this month. After a high of $440 a share on March 1, 2019, the planemaker’s stock had fallen to just $309/share on Jan. 22 of this year. It’s worth remembering that Boeing still has $463 billion in the order book for more than 5,400 non-military aircraft, the bulk of which are 737 MAX aircraft.
In the midst of the U.S. Air Force being unhappy with the KC-46 tanker, Boeing also said it would cut production rates on the 787 Dreamliner from 14 to 10 aircraft per month starting in 2021. Some good news for the company came last week when the much-delayed 777X finally flew. That flight-test program continues through a soggy Seattle winter, with Boeing nearly a year behind on the program. The company originally planned to have the 777X ready for 2021 but questions remain about how much scrutiny the FAA and other aviation regulators will give the program. The 777X has new engines, a new composite wing with foldable wingtips and a heavily revised fuselage with a stretch.