Boeing indicated that it would cut the production of its bigger 787 Dreamliner aircraft as the company posted its first annual loss since 1997
) on Wednesday swung to its first annual loss since 1997 as 737 MAX costs doubled to nearly $19 billion, and the plane manufacturer indicated it would again cut production of its bigger 787 Dreamliner aircraft, currently its main source of cash.
Deliveries of hundreds of jets remain frozen while Boeing updates the flight control system and software to address issues involved in both crashes. The amount does not include potential settlements or damages from more than 100 lawsuits the company faces from victims’ families in both crashes, which together killed 346 people. Boeing is also the target of a U.S. criminal investigation into matters related to the 737 MAX.
Boeing’s core operating loss was $2.53 billion, or $2.33 per share, compared with a profit of $3.87 billion, or $5.48 per share, a year earlier. Boeing had already announced in October plans to lower the production rate for its 787 Dreamliner to 12 per month in late 2020 from 14 and now expects to cut the rate to 10 per month in early 2021, hurting cash flow at a time when its debt is mounting.
The MAX charges include $8.3 billion to compensate airline customers that are canceling flights and scaling back growth plans in a hit to profits while their MAX jets remain grounded.
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