Boeing swings to annual loss as 737 MAX costs double

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The company's biggest customer, Boeing, said on Wednesday it was expecting to resume MAX production ahead of a regulatory approval for the jet's return to service by mid-2020.

Boeing reported revenue of $76.6 billion for financial 2019, down 24 per cent from the $101 billion reported a year ago.

Adding to the barrage of bad news, Boeing notched its first annual loss past year since 1997, when it shut down assembly lines amid a supplier meltdown. 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.

Boeing has put the total cost of the two deadly crashes of its 737 Max airliners at almost $19bn (£14.6bn) and slumped to its first annual loss in more than two decades.

It was the first annual loss since 1997, when Boeing was roiled by parts shortages, production delays, and expenses from merging with McDonnell Douglas.

The company also booked more charges on its military tanker and space programs.

In October, Boeing also said it will reduce 787 production per month from 14 to 12 in late 2020.

Mr Calhoun said the crashes and resulting scrutiny from regulators mean the Max will be "the safest aircraft ever flown".

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The debacle's costs to Boeing are rising to more than $18 billion, the company said, roughly double what it outlined in the previous quarter. It is also the target of a USA criminal investigation into matters related to the 737 MAX plane.

"More negative news from Boeing. on our MAX deliveries", the memo read.

Boeing is struggling through a crisis stemming from two crashes of its 737 Max that killed all 346 people aboard the flights.

Fourth-quarter revenue tumbled to $17.9 billion, far below Wall Street's forecast of $21.7 billion, according to a FactSet survey of analysts.

Boeing climbed 2.5 per cent to US$324.61 at 9:35 a.m.in NY.

Analysts estimate that Boeing has been losing around $1 billion a month because of the 737 MAX grounding. Even though 737 MAX production is being temporarily suspended, Boeing is keeping its workforce intact.

Calhoun, a former General Electric and Nielsen executive who had been on Boeing's board since 2009, became CEO this month. There are more than 600 Boeing suppliers in Canada but the impact on them could not be ascertained by Skies in the immediate aftermath of the conference call. "Management have earmarked around 19 billion dollars to cover the cost of the crisis and they've essentially put all the bad news out there in one go and it's being taken well by the market as investors were fearing much worse".

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