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Boeing Reports Sixth Consecutive Quarterly Loss
Boeing reported yet another quarterly loss on Wednesday amidst a continued depression in worldwide aviation demand. But the manufacturer remained optimistic that a rebound was in sight with Covid-19 vaccination programs worldwide and the return of its Boeing 737 MAX products to services.
The aircraft manufacturing giant has been in crisis mode ever since March 2019 when it was forced to ground its 737 MAX for 20 months due to safety concerns after two separate fatal aircraft accidents killed 346 people. Reporting a $537 million loss in the first quarter makes this Boeing’s sixth consecutive quarter in the red.
“While the global pandemic continues to challenge the overall market environment, we view 2021 as a key inflection point for our industry as vaccine distribution accelerates and we work together across government and industry to help enable a robust recovery,” said Boeing Chief Executive Officer Dave Calhoun in a press release.
Despite having inked a number of new contracts to build the 737 MAX with airlines during the Covid-19 pandemic, the aircraft manufacturer has also laid blame on the depressed deliveries of its Boeing 787 Dreamliner aircraft as a cause of the quarter drag.
Having only resumed deliveries on the 787 in March following a suspension last fall to address production problems. But a decrease in Dreamliner deliveries was a factor in the 10% drop in revenues to $15.2 billion compared with the same period a year prior.
In November 2020, U.S. regulators at the Federal Aviation Administration approved the 737 MAX to resume service. Since that time, Boeing has managed to deliver more than 85 737 MAX aircraft, and 21 airlines have returned the aircraft to their fleets, Boeing said.
However, earlier this month, Boeing notified 16 airlines of an electrical problem with the aircraft, leading to the grounding of more than 100 B737MAX planes globally, just before the peak summer travel season arrives.
While a fix has taken longer than expected, Calhoun said that Boeing is “finalizing the plans and documentation” over a process to return those B737MAX planes to service. After the FAA approves the process, “[Boeing] expect[s] the work to take a few days per airplane,” he said.
The removal of these MAX planes from service has had limited impact on Boeing’s airline customers thus far because air traffic levels are still depressed due to Covid-19.
Searching for Success
Unfortunately for Boeing, Southwest Airlines chief Gary Kelly, whose airline is key customer of the aircraft manufacturer, last week said the problem needs to be resolved quickly because travel will soon significantly pick up.
Calhoun was named CEO in December 2019 as the company reeled from the scandal over the 737 MAX groundings. Last week, Boeing announced that it raised the retirement age for Calhoun to 70, keeping him in the corner office potentially through 2028.
Boeing reported operating earnings of $405 million in the quarter in its defense, space and security business, but the results in that division were dented by a $318 million hit in one-time expenses of a military jet connected to “Covid-19 impacts and performance issues at a key supplier,” Boeing said in a statement. “Overall, we made important strides this quarter, and we must stay diligent as we navigate through this global pandemic together.”
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