Boeing posts biggest-ever earnings loss after 737 Max grounding
In today’s installment of least surprising news, Boeing has posted its biggest quarterly loss ever after two plane crashes and the subsequent international grounding of its 737 Max planes.
On Wednesday the airplane manufacturer announced a 35% drop in revenues and a loss of $2.9 billion in the second quarter. This news comes a week after Boeing announced a $4.9 billion charge due to costs tied to the grounding.
After two deadly crashes due to software issues on its 737 Max jets, Boeing’s business is flailing. The company said its deliveries of commercial planes sank 54%, down to just 90 planes, in the second quarter, a steep cut from the 194 planes it delivered a year earlier.
While Boeing has developed a software fix, which awaits FAA approval before it can get the grounded planes flying again, it has cut production on them for now. The company anticipates that the planes will be back in service early in the fourth quarter, but it says it’s prepared to cut production even more if necessary, including possibly stopping it entirely.
That would be a big blow to the embattled manufacturer and to airlines like United, Southwest, and American that had purchased the once-popular long-haul planes. As a result of the grounding, airlines have been forced to cancel flights and find other ways to fulfill their flying schedules while waiting for the plane to return to the air—assuming customers are even willing to set foot on them again.