Boeing has posted a record loss of US$11.94 billion on a massive write-off on the 777X program and COVID-19 impacts on the aviation industry.
The result was also impacted by the 737 MAX grounding with a further write-off of US$468 million.
The 777X pre-tax charge of US$6.50 billion has taken the industry by surprise with Boeing saying it reflects discussions with customers for later deliveries and reduced demand as well as more complex certification standards.
The 777X which was to be first delivered in late 2019 will now start deliveries in late 2023.
The net loss is a savage drop from last year’s net loss of US$636 million.
Revenue was US$58.1 billion down 24 percent from $US76.5 billion in 2019.
On a brighter note, the 737 MAX has received regulatory approval to resume operations and restarted deliveries in the US, Brazil, Canada, and now Europe.
The company’s backlog is put at US$363 billion with a commercial backlog of over 4,000 aircraft.
Boeing President and Chief Executive Officer Dave Calhoun said “2020 was a year of profound societal and global disruption which significantly constrained our industry. The deep impact of the pandemic on commercial air travel, coupled with the 737 MAX grounding, challenged our results.
“I am proud of the resilience and dedication our global team demonstrated in this environment as we strengthened our safety processes, adapted to our market, and supported our customers, suppliers, communities, and each other.
“Our balanced portfolio of diverse defense, space and services programs continues to provide important stability as we lay the foundation for our recovery. While the impact of COVID-19 presents continued challenges for commercial aerospace into 2021, we remain confident in our future, squarely-focused on safety, quality, and transparency as we rebuild trust and transform our business.”
Since the first US FAA approval to return the 737 MAX to operations, Boeing has delivered over 40 aircraft and five airlines have returned their fleets to service as of January 25, 2021.
The delay in the 777X program is a major blow to Boeing and its suppliers as the company has orders for over 300 of the aircraft. However, the aircraft seats over 400, and in the COVID-19 world that sized aircraft is not wanted.
Another program in trouble is the top-selling 787 with production issues halting deliveries for over three months.
Boeing has also slashed the production rate of the 787 over the last eighteen months from a top of 15 a month to just five.