Boeing released its third-quarter financial results today, which show a sharp decline in the company’s profits compared to last year. However, these results assume that the Boeing 737 MAX will regain certification and re-enter operation before the end of the fourth-quarter.
Today saw the release of The Boeing Company’s much-anticipated third-quarter financial results.
The Chicago-based aerospace giant has endured its annus horribilis in the aftermath of two fatal crashes involving the popular Boeing 737 MAX.
Today’s financial results are not as dire as the second-quarter of 2019, which saw a record $3.4 billion loss for the company. But they still represent a 21% year-on-year drop in revenue for the quarter and a 51% drop in profits.
Considering the scale of the Boeing 737 MAX scandal, the fact the third-quarter returned a profit at all is impressive. In the report released today, Boeing’s Chief Executive Officer, Dennis Muilenburg, said,
“Our top priority remains the safe return to service of the 737 MAX, and we’re making steady progress.”
Boeing assumes the 737 MAX will be certified before the end of the year
Boeing’s third-quarter financial results have been compiled based upon the assumption that the Boeing 737 MAX will regain certification before the end of the year.
While the company’s sales of most of its other aircraft have been unaffected by the Boeing 737 MAX groundings, the 737 MAX is a very important aircraft for the company.
Following on from the success of previous generations of the Boeing 737, the MAX generation secured thousands of orders in record time.
According to Boeing, it actually became the fastest-selling aircraft in the company’s history, with more than 4,700 orders to date. Assuming the type will be recertified by the end of the year, however, is risky.
Boeing has previously assumed a number of deadlines for recertification. These have all come and gone as the issues with the 737 MAX platform continue to be ironed out. Needless to say, the longer Boeing’s fastest-seller remains on the ground, the more money Boeing and its airline clients stand to lose.
It’s not just the FAA Boeing needs to convince
As the primary aviation authority in the world, the Federal Aviation Administration has historically taken a lead on certification of new aircraft.
But in recent years, the FAA has received criticism for allowing Boeing to have far too much influence over the certification process for its own aircraft.
Just after the Boeing 737 MAX groundings in March, reports emerged which suggested that Boeing carried out much of the certification process for the 737 MAX itself.
This conflict of interest appears to have had deadly consequences in the case of the Boeing 737 MAX.
It also appears to have convinced other aviation authorities, namely the European Union Aviation Safety Agency (EASA), that the FAA’s word shouldn’t be taken as gospel.
The EASA recently stated that it wants to test the Boeing 737 MAX itself before rescinding the ban on the type.
Depending on how Boeing reworks the 737 MAX to make it safe for flight, it could be a lot longer before the type regains certification in Europe.
Either way, Boeing’s assumption, for reporting purposes at least, that the 737 MAX will be ready to fly by the end of the year could well be proven wrong.