A trifecta of business cataclysms—COVID-19’s impact on air travel, the 737 MAX grounding, and a slow recovery in international air travel that has depressed demand for widebody aircraft—has dramatically impacted Boeing’s bottom line. In releasing its fourth-quarter 2020 financials today, Boeing says revenue declined by 15 percent in the fourth quarter and was down overall by 24 percent for the year compared to 2018, which was a significantly down year compared to 2018. Boeing’s net loss for 2020 of $11.9 billion is the largest it has ever had.
Compounding COVID-19-related travel restrictions, the long road back to airworthiness for the 737 MAX and a massive settlement with the Department of Justice added up to some $1.8 billion in accounting costs in the fourth quarter alone, on top of a $6.5 billion write-off in the 777X program, which is now slated for first deliveries in 2023.
“2020 was a year of profound societal and global disruption which significantly constrained our industry. 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,” said Boeing President and Chief Executive Officer Dave Calhoun. “Our balanced portfolio of diverse defense, space and services programs continues to provide important stability as we lay the foundation for our recovery.” Boeing completed the year delivering just 157 commercial aircraft, down from 380 the year before.
“As part of our fourth-quarter results, we also shared that we now anticipate that the first 777X delivery will occur in late 2023,” Calhoun said in a statement to Boeing employees. “This schedule, and the associated financial impact, reflects a number of factors, including an updated assessment of global certification requirements, our latest assessment of COVID-19 impacts on market demand, and discussions with customers with respect to aircraft delivery timing. We remain confident in the 777X and the unmatched capabilities and value it will offer our customers. This past quarter, we also launched comprehensive production inspections of our 787 airplanes to ensure that each meets our rigorous engineering specifications prior to delivery, as we also drive stability in our production system to be better positioned for market recovery. While this limited our deliveries and revenue for the quarter, it is the right thing to do for our customers and another demonstration of our uncompromising commitment to quality.”
On the same day Boeing closed its books on 2020, the European Union Aviation Safety Agency approved the 737 MAX for return to service in Europe. “We have every confidence that the aircraft is safe, which is the precondition for giving our approval,” said EASA’s Executive Director Patrick Ky. “But we will continue to monitor 737 MAX operations closely as the aircraft resumes service. In parallel, and at our insistence, Boeing has also committed to work to enhance the aircraft still further in the medium term, in order to reach an even higher level of safety.”