Boeing reports $11.9bn annual loss

NEW YORK: 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 due to Covid-19 and the 20-month grounding of its 737 MAX model, now expects first deliveries of the widebody 777X in late 2023, compared with the earlier time-table of 2022.

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.”

In light of radically worsened market conditions, Boeing has taken a sledgehammer to costs, announcing job cuts of some 30,000 employees over two years. The company also completed a $25 billion bond offering to provide liquidity to ride out the downturn.

For the fourth quarter, Boeing reported a bigger-than-expected loss of $8.4 billion after accounting for a $6.5 billion hit from the 777X. Revenues fell 14.6 percent to $15.3 billion.

The fourth quarter also included a number of other one-time hits: payments to the US Justice Department to settle criminal charges over the 737 MAX crashes, the altered production schedule for the same aircraft, production issues on the KC-46 US military tanker and the drag from anemic demand for Boeing’s global services business.

Each of these items amounted to a hit of between $275 million and $744 million. As far as the 777X, Boeing has now pushed back the timeframe at least three times.

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