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Boeing reports $11.9 bn annual loss after hit on 777X delay

Boeing reported an $11.9 billion annual loss following one-time costs on the delayed 777X plane program - Jason Redmond / ©AFP
Boeing reported an $11.9 billion annual loss following one-time costs on the delayed 777X plane program - Jason Redmond / ©AFP

(AFP)

Boeing concluded a bruising 2020 on Wednesday with another unpleasant surprise: a $6.5 billion hit from delays to its new 777X plane that exacerbated its annual loss.

The aerospace giant, which saw its revenues ravaged by the commercial airline downturn and a 20-month grounding of its 737 MAX model, now expects first deliveries in the widebody 777X in late 2023, compared with the earlier time-table of 2022.

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The accounting for the 777X prolongation pushed Boeing’s fourth-quarter loss to $8.4 billion, plunging its tally for all of 2020 to $11.9 billion in the red.

The past year “was a year of profound societal and global disruption which significantly constrained our industry,” said Chief Executive Dave Calhoun. “The deep impact of the pandemic on commercial air travel, coupled with the 737 MAX grounding, challenged our results. 

“I am proud of the resilience and dedication our global team demonstrated in this environment as we strengthened our safety processes, adapted to our market and supported our customers, suppliers, communities and each other.”

Boeing reported a fourth-quarter loss of $8.4 billion following the accounting of $6.5 billion. Revenues fell 14.6 percent to $15.3 billion.

Boeing has now pushed back the 777X timeframe at least three times. 

When it delayed the program in 2020, Boeing said the prolongation reflected in part the need to incorporate lessons from the 737 MAX certification, as well as uncertainty about airline demand due to the downturn in travel from Covid-19. Boeing described similar dynamics on Wednesday.

While Boeing’s results over the last two years were weighed down by the MAX grounding, the outlook for that program has improved after commercial flights on the plane resumed in late 2020 following a lengthy grounding due to two fatal crashes.

A full return in commercial plane travel is not expected until after 2021.

Shares of Boeing tumbled 3.2 percent to $195.60 in pre-market trading.

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