Aircraft manufacturer Boeing has posted a record quarterly loss on the back of the ongoing grounding of its 737 Max planes after two deadly crashes.
The world’s largest plane manufacturer also warned it might need to further slow or even halt production of the Max aircraft as it tries to resolve the issues that led to the twin tragedies.
The 737s have been grounded since mid-March because of crashes in Indonesia and Ethiopia that killed more than 300 people. Boeing has continued to build the planes – its best-sellers – although at a slower pace.
In June, pictures emerged of completed but unsold Max 737s being stored next to workers’ vehicles in the company car park at Boeing’s factory in Renton, Washington.
On Wednesday (US time), Boeing reported a $US3 billion ($4.3 billion) loss for the June quarter. It also revealed it had burned through about $US1 billion ($1.4 billion) in cash in that period.
Its share price fell by 3.2 per cent to $US361.43 as a result – one of the day’s biggest drags on US markets
Boeing is still hoping to have its Max planes back in the air by October. But chief executive Dennis Muilenburg said any further delays in approval from the US Federal Aviation Administration could jeopardise the aircraft’s production.
A further slowdown or temporary shutdown of 737 Max production was “not something we want to do, but an alternative that we have to prepare for,” Mr Muilenburg told investors on a conference call, according to CNN.
The company also warned that it might have to push back the first delivery date for its 777X planes, which had been scheduled for late 2020.
“There is significant risk to this schedule given engine challenges, which are delaying first flight until early 2020,” it said.
Boeing has also abandoned its previous financial guidance following the June quarter’s poor result.
“Due to the uncertainty of the timing and conditions surrounding return to service of the 737 Max fleet, new guidance will be issued at a future date,” the company said.
RELEASE: Boeing Reports Second-Quarter Results https://t.co/TWiBuhZWY0
— The Boeing Company (@Boeing) July 24, 2019
In June, Bloomberg estimated Boeing was storing 500 grounded 737 Max jets around the world, including 100 at the Washington factory.
The company said last month that it had orders for 4450 of the planes, but had largely stopped deliveries after the grounding. It delivered 30 Maxes last May, compared to 68 in May 2018.
“This is a defining moment for Boeing and we remain focused on our enduring values of safety, quality, and integrity in all that we do, as we work to safely return the 737 Max to service,” Mr Muilenburg said on Wednesday.
“During these challenging times, teams across our enterprise continue to perform at a high level while delivering on commitments and capturing new opportunities driven by strong, long-term fundamentals.”