Boeing has announced its first annual loss since 1997. The manufacturer today released its financial figures for Q4 of 2019. These show that aircraft deliveries have dropped significantly year on year as a result of the ongoing MAX crisis.
2019 was not Boeing’s best year by any stretch of the imagination. Alongside the ongoing Boeing 737 MAX crisis which has claimed 346 lives, the American manufacturer has also been dealing with delays to the 777X project. Thankfully, the latter of the two seems to be back in motion as the aircraft took its delayed first flight on Saturday.
First loss in 23 years
One of the big standouts in Boeing’s Q4 results is that the manufacturer has posted its first annual loss in almost a quarter of a century. For the duration of 2019, Boeing made a net loss of $636 million US dollars. This is a significant change from 2018, where net earnings stood at $10,460 million US dollars.
According to the company its significant drop in operating cash flow, contributing to the loss, was largely due to the impact of the 737 MAX crisis, in addition to the timing of expenditures. David Calhoun took up the role of Boeing CEO in January following the resignation of the previous CEO Dennis Muilenburg. Calhoun commented on the results saying:
We recognize we have a lot of work to do. We are focused on returning the 737 MAX to service safely and restoring the long-standing trust that the Boeing brand represents with the flying public. Safety will underwrite every decision, every action and every step we take as we move forward.” He went on to add: “Fortunately, the strength of our overall Boeing portfolio of businesses provides the financial liquidity to follow a thorough and disciplined recovery process.”
Huge drop in deliveries
Boeing has witnessed a huge drop in the number of aircraft it delivered in 2019. This was largely down to being unable to deliver the 737 MAX. In fact, the manufacturer was forced to halt production of the aircraft.
In 2019, the company delivered just 380 commercial aircraft. This equates to just 47% of 2018’s delivery figure of 806 aircraft. Interestingly, only deliveries of the 737 and 777 were lower than in previous years. All of the other aircraft shipped more units. The numbers per aircraft are:
Boeing currently believes that the 737 MAX will be recertified in mid-2020, with the FAA saying it could be earlier. Once the aircraft is recertified, Boeing will be able to resume deliveries. This will mean that a major stream of cash for the company is re-opened.
Progress is also being made with the Boeing 777X program. While the aircraft was supposed to take its first flight last Spring, lengthy delays were caused by engine issues. Now, however, the aircraft has taken to the skies for the first time.
What do you make of Boeing’s 2019 results? To be expected, or worse than you thought? Let us know your thoughts in the comments!