Boeing posts its biggest annual loss on pandemic and 737 Max woes

European Union Aviation Safety Agency declares Boeing 737 Max safe to return to service in Europe

epa08967899 (FILE) - Boeing staff walk past a Boeing model plane on display at the Singapore Airshow in Singapore, 19 February, 2008 (reissued 26 January 2021). The Boeing Company is to publish their 4th quarter 2020 results on 27 January 2021.  EPA/HOW HWEE YOUNG
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Boeing posted a fourth-quarter loss as a result of the Covid-19 pandemic and the grounding of its 737 Max jet, which dragged down its full-year earnings to the company's biggest annual loss.

Net loss for the three months ending December 31 reached $8.4 billion, a $14.65 loss per share, widening from a net loss of $1.01bn in the prior-year period, Boeing said on Wednesday. Fourth-quarter revenue fell 15 per cent year-on-year to $15.3bn.

The company posted a full-year net loss of $11.9bn, widening from $636 million in 2019. Annual revenue rose by nearly a quarter to $58.1bn.

"2020 was a year of profound societal and global disruption which significantly constrained our industry," Dave Calhoun, Boeing's president and chief executive, said. "The deep impact of the pandemic on commercial air travel, coupled with the 737 MAX grounding, challenged our results."

The Covid-19 pandemic has decimated air travel, pushing some airlines to bankruptcy or forcing them to seek government aid and delay taking delivery of jets.

Boeing also said it expects the first delivery of its 777X widebody in late 2023, marking the third delay of the jet's debut and booking a $6.5bn pre-tax charge on the programme.

Boeing now anticipates that the first 777X delivery will occur in late 2023.

"This schedule and the associated financial impact, reflect a number of factors, including an updated assessment of global certification requirements, the company's latest assessment of the pandemic on market demand, and discussions with its customers with respect to aircraft delivery timing," the company said.

Boeing also added a charge of $468m of abnormal production costs related to the 737 Max's grounding. It also took a  $744m charge related to the previously announced agreement with the US Department of Justice in January that will allow the company to avoid prosecution over fraud conspiracy charges related to the 737 Max's flawed design.

In terms of its 787 Dreamliner, Boeing plans to transition its production rate to 5 per month in March 2021, at which point the 787 final assembly will be consolidated to Boeing South Carolina, it said.

Separately, the European Union Aviation Safety Agency (Easa) approved the revamped 737 Max to return to service in Europe following a 22-month ban on the jet.

"We have every confidence that the aircraft is safe, which is the precondition for giving our approval. But we will continue to monitor 737 Max operations closely as the aircraft resumes service," Easa executive director Patrick Ky said. "In parallel, and at our insistence, Boeing has also committed to work to enhance the aircraft still further in the medium term, in order to reach an even higher level of safety."

Easa mandated a package of software upgrades, electrical working rework, maintenance checks, operations manual updates and crew training which will allow the plane to fly safely in European skies following two fatal crashes of the model that killed 346 people.