Boeing said the accident involving the Alaska Air plane would delay its economic recovery and cost it $443 million in compensation to the airline’s customers.
Boeing reported a core operating loss of $388 million, or $1.13 a share, down from the $440 million it lost on that basis a year earlier. That was significantly less than analysts’ forecasts of $1.63 per share in the quarter. But the improvement came outside the core commercial jet unit, where operating losses nearly doubled to $1.1 billion.
Revenue fell by $1.4 billion as problems at the aircraft maker resulted in a sharp reduction in aircraft deliveries to its customers.
The company is now trying to restore its “damaged” image, but also to satisfy customers – airlines – who are affected by not receiving the aircraft they have ordered. Boeing said it is taking the necessary steps to correct the quality issues. However, these corrections will continue to cause further losses in the company’s profits in the coming months, as well as delays in deliveries.
Boeing said it will produce fewer 737 Max planes than originally planned for the rest of this year as it tries to fix problems on its assembly lines. “We will take the necessary time to strengthen our quality and safety management systems, and this work will lay the foundation for a stronger and more stable future,” said CEO Dave Calhoun, who announced during the quarter his plans to leave his post by the end of the year.
The company said the financials were rocked by compensation for airline customers for the three-week grounding of its 737 Max 9 planes following the Jan. 5 incident in which a window was detached from the plane during flight.
Alaska Air and United Airlines, the two carriers with the most 737 Max 9 aircraft in their fleets, have already announced that they have reached compensation agreements with Boeing.
The incident has sparked a series of investigations against Boeing by the National Transportation Safety Board, the Federal Aviation Administration and the Justice Department, the latter of which could expose the company to criminal liability. It has also focused attention on the safety and quality of its aircraft, as well as how it handles employees who raise concerns about those issues, including through congressional hearings.
Calhoun said he is confident Boeing will be able to make the changes it needs to return to profitability for the first time since 2018, but said the changes it will make will delay the timeline for it to be profitable again.
With information from CNN
