Chicago, Jan 26 (AP) Boeing reported a loss of US$4.16 billion in the fourth quarter as the financial fallout worsened by production flaws in one of its best-selling aircraft, the 787 Dreamliner. The aircraft maker took a charge of US$3.5 billion to cover additional delays in delivering copies of its 787 jetliner and to compensate airlines that are still waiting to receive their planes.
The company said manufacturing problems with the 787 would add US$2 billion to abnormal production costs, more than double the earlier estimate. Boeing has been shutting down for a year in which plane sales resumed after a downturn caused by the grounding of its 737 MAX airliner and the pandemic that crippled air travel. The Chicago-based company still lagged behind European rival Airbus in delivering new aircraft last year, partly because of the 787.
The two-aisle 787 was grounded for more than three months in 2013 by overheating lithium-ion batteries. Following the design change, the aircraft became a hit with both airlines, who appreciated its fuel economy on longer flights, and passengers, who preferred the larger windows and more comfortable cabin. Boeing halted deliveries in late 2020 because of flaws in production, including gaps where the carbon-composite fuselage panels joined. Shortly after resuming deliveries, Boeing halted them again in May 2021 as other problems surfaced, including faulty titanium parts from a supplier, and the company has yet to receive Federal Aviation Administration approval for its improvements. has been unable to.
The resale process is going well. It’s long, it’s disciplined, but it’s going well, CEO David Calhoun told CNBC. Our mechanics are learning a lot in the process. Boeing’s failure to resume deliveries is causing headaches for airline customers. Without the 787, which was expected to be received by now, American Airlines has planned few international flights for next summer. US officials say Boeing has agreed to pay penalties for the missing deadline, and they say additional compensation could be negotiated if the delay becomes longer.
The 787 saga unfolds just as Boeing is trying to break the initial record for the 737 MAX, which was frozen nearly two years after two crashes worldwide that killed a total of 346 people. After a redesign that won FAA approval, Boeing delivered 245 MAX jets last year, bringing in much-needed cash. Separately, Boeing took a USD402 million write-off for a refueling tanker it builds for the US Air Force. That allegation pushed Boeing’s usually credible defense and space business at a disadvantage.
Boeing’s fourth-quarter loss compared to a loss of $8.44 billion during the same period a year ago, when airlines had little appetite for new planes. Excluding the one-time fee, Boeing would have lost $7.69 per share, compared to Wall Street’s expectations for a loss of 36 cents per share, according to the FactSet survey.
Revenue was US$14.16 billion, down 3 percent from a year ago, less than analysts’ forecast of $16.54 billion. CEO Calhoun called 2021 a rebuilding year, and said in a note to employees that Boeing is well positioned to accelerate progress to 2022 and beyond. He said the airline industry’s recovery from the pandemic has boosted demand for new planes, and he expressed optimism about the long-term prospects for the 787.
Boeing shares fell more than 2 percent on Wednesday. (AP).
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