Yahoo Finance Boeing takes $6.9 billion hit over 737 Max disasters
Boeing’s earnings will take a US$4.9 billion (AU$6.93 billion) hit due to costs associated with its 737 Max jet groundings.
In a statement this week, Boeing said the sum will relate to concessions and reimbursements granted to customers for disruptions caused by the fleet being grounded, and delivery delays.
The loss is also related to lower production.
The charges will be reflected in its full second-quarter earnings release on 24 July, which will discuss the company’s financial outlook and the impact of the 737 Max grounding.
The company predicts the troubled 737 Max fleet will have approval to return to operation in the fourth quarter of 2019.
It comes as the company reels from two major 737 Max aircraft disasters which killed all passengers onboard, a total of 346 passengers and crew.
The earnings announcement followed another statement from Boeing this week, which said the company had funnelled $50 million of the pledged $100 million to relief for families of the victims.
“We remain focused on safely returning the 737 MAX to service," Boeing chairman, president and CEO Dennis Muilenburg said on Thursday.
"This is a defining moment for Boeing. Nothing is more important to us than the safety of the flight crews and passengers who fly on our airplanes.
“The MAX grounding presents significant headwinds and the financial impact recognised this quarter reflects the current challenges and helps to address future financial risks."
Boeing chief financial officer Greg Smith added, "We are taking appropriate steps to manage our liquidity and increase our balance sheet flexibility the best way possible as we are working through these challenges.
“Our multi-year efforts on disciplined cash management and maintaining a strong balance sheet, in addition to our strong and broad portfolio offerings, are helping us navigate the current environment."
Boeing’s financial woes
Within a week of the March Ethiopian Airlines crash, the company had shed $29 billion in value.
In May, the French widow of a man killed in the Ethiopian Airlines March crash sued Bowing for $276 million, or a full day of Boeing’s earnings.
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