New York, United States, Jan 26 (AFP\/APP):Boeing reported a hefty fourth-quarter loss Wednesday as mounting costs connected to the widebody 787’s woes more than offset a boost from the comeback of the 737 MAX after a lengthy grounding.<\/p>\n
The US aviation giant reported a total of $3.8 billion in one-time expenses associated with compensating airlines for delayed deliveries of the 787 and more costly production processes.<\/p>\n
Those costs were the biggest factor in a larger-than-expected quarterly loss that also pushed Boeing into the red in 2021 for the third straight year.<\/p>\n
Chief Executive David Calhoun described 2021 as a “rebuilding year,” noting the progress on the 737 MAX, the narrow-body jet that was grounded for 20 months following two fatal crashes.<\/p>\n
The 787’s current travails date to late summer 2020, when the company uncovered manufacturing flaws with some jets. Boeing subsequently identified additional issues, including with the horizontal stabilizer.<\/p>\n
The difficulties curtailed deliveries between November 2020 and March 2021. Boeing suspended deliveries again in May after more problems surfaced.<\/p>\n
Calhoun declined to offer a timetable for resuming 787 deliveries.
\n“On the 787 program, we’re progressing through a comprehensive effort to ensure every airplane in our production system conforms to our exacting specifications,” he said.<\/p>\n
“While this continues to impact our near-term results, it is the right approach to building stability and predictability as demand returns for the long term.”<\/p>\n
– MAX comeback –<\/p>\n
For the quarter Boeing reported a $4.1 billion loss as revenues fell 3.3 percent to $14.8 billion.
\nBoeing reported an annual loss of $4.2 billion, compared with a loss of $11.9 billion in 2020.<\/p>\n
Boeing also suffered an operating loss in its defense, space and security business following $402 million in one-time costs on the KC-46A tanker program.<\/p>\n
The tanker costs are primarily due to shifting customer preferences and supply chain disruptions due to Covid-19, a Boeing spokesperson said.
\nThe difficulties with the 787 dampened Boeing’s momentum as the airline industry recovers from a devastating slump due to Covid-19.<\/p>\n
In another positive, though, Boeing has resumed deliveries of the 737 MAX, which was grounded for 20 months following two deadly crashes.
\nThe company also has cheered a decision by Chinese authorities to approve the return of the MAX, although it has yet to resume deliveries to Chinese carriers.<\/p>\n
Boeing has also seen an uptick in orders for commercial jets and cargo planes.<\/p>\n
– ‘Conformance’ issues –<\/p>\n
Calhoun told CNBC that it has made “significant” progress on the 787 but “we can’t rush it.”<\/p>\n
“We are working through real conformance issues. Not safety issues, conformance issues,” he told the network. “Meaning that the airplane is built exactly and precisely according to the engineering drawings.”<\/p>\n
Boeing did not offer a timetable for resuming deliveries amid ongoing talks with the Federal Aviation Administration. The company said it is currently producing the jet “at a very low rate.”<\/p>\n
Boeing doubled its estimates for total “abnormal costs” associated with the 787 problems to $2 billion after concluding in the fourth quarter that the issues “will take longer than previously expected” to resolve.<\/p>\n
Peter McNally, an analyst at Third Bridge, described Boeing’s quarter as “turbulent,” noting that the issues with the 787 “are dragging into 2022 with major financial consequences,” he said in a note.<\/p>\n
“The company continues to lose ground to its primary competitor, Airbus,” McNally said.<\/p>\n
“However, there have been some bright spots as underlying demand for travel has picked up, Boeing is booking new orders for customers and the balance sheet has started to move in a more positive direction.”
\nShares fell 2.0 percent to $200.10 in early trading.<\/p>\n","protected":false},"excerpt":{"rendered":"
New York, United States, Jan 26 (AFP\/APP):Boeing reported a hefty fourth-quarter loss Wednesday as mounting costs connected to the widebody 787’s woes more than offset a boost from the comeback of the 737 MAX after a lengthy grounding. The US aviation giant reported a total […]<\/p>\n
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