Boeing has posted its first annual loss since 1997 as originally forecast losses of US$8 billion resulting from the grounding of its 737 MAX jet are now approaching US$19 billion, a sum which does not include any likely compensation payout to the families of the 346 victims of both fatal crashes involving the jet.
The North American planemaker had originally anticipated it would return to the skies with full FAA approval by the end of last year, but that has now been rescheduled for June this year. Current costs incurred extend to US$14.6 billion and Boeing has adopted a cautious tone through its indication that a further US$4 billion in charges will likely be incurred in 2020. There is also the possibility Boeing will have to face a number of U.S criminal investigations into 737 MAX-related. To make matters worse, Boeing is also cutting back further on its production of its current principal source of airplane revenue, the 787 Dreamliner. In October last year it announced it would be reducing production levels from 14 units to 12 units per month in late 2020, which will now fall to 10 units per month in the early part of 2021.
Boeing has reported negative free cash flow of US$2.67 billion for the fourth quarter of 2019, which ended on December 31, as opposed to a positive free cash flow of US$2.45 billion for the same quarter in 2018.
