Boeing delayed commercial entry into commercial service of its 777X widebody jet for another year and posted a record net loss of nearly $ 12 billion for 2020, even as it began delivering the 737 Max to customers last month.
The company won’t start delivering the 777X – which can accommodate 384 passengers – to airlines until the end of 2023 and has taken a charge of $ 6.5 billion to reflect the program’s declining productivity. Several other charges brought the quarter’s total to $ 8.3 billion.
The aerospace manufacturer attributed the delay to declining demand due to Covid-19 and requests from customers to take planes later, as well as an updated estimate of how long it will take for regulators to take aviation to certify the aircraft.
“This timeline, and the associated financial impact, reflects a number of factors,” said Managing Director David Calhoun. “We remain confident in the 777X.”
Market demand for widebody jets was already softening before the pandemic struck. The outbreak has further reduced the attractiveness of larger jets to airlines passenger appetite for international travel was late on their return to domestic flights.
The 777X was supposed to enter commercial service at the end of 2020 before the company pushed that date back twice, most recently in July, to 2022. Previously, the delays were due to problems with its General Electric engine .
Boeing’s financial results also reflected the continued fallout from the 737 Max – which crashed twice in five months, killing 346 people – even as it began to resume commercial service. The US Federal Aviation Administration lifted its order to ground the aircraft late last year, American Airlines reinstated it in its program in December, and Alaska Airlines took delivery of the aircraft. one of the jets this week.
The company posted a fourth-quarter net loss of $ 8.4 billion on revenue of $ 15.3 billion, a 15% drop in revenue from the same period a year earlier. The company’s full-year net loss of $ 11.9 billion on $ 58.2 billion in revenue, down 24% from 2019, fell after the loss of $ 636 million 2019. The 2019 net loss was Boeing’s first annual loss in more than two decades.
“2020 has been a year of profound societal and global disruption that has severely limited our industry,” said Mr. Calhoun. “The profound impact of the pandemic on commercial air travel, coupled with the grounding of the 737 Max, called our results into question. . . Our balanced portfolio of various defense, space and service programs continues to provide important stability as we lay the foundation for our recovery.