Cash flow diminished for Boeing, the United States-owned aerospace company in 2019 as it reported its first annual loss in more than two decades following the lengthy grounding of the 737 MAX.
The company published its results for 2019, reporting a $1.0 billion loss in the fourth quarter and a $636 million loss for all of 2019, the company’s first annual loss since 1997. While it ended Q3 2019 with a profit of $895 million due to the performance of its Defense, Space and Security and Global Services divisions, its nine-month performance was already in the red.
The MAX has been grounded since March following two fatal crashes. Boeing estimated additional costs of $9.2 billion connected to the grounding to compensate customers and account for the impact of lower production levels on expenses. The commercial division of the company, which recorded only 380 aircraft deliveries throughout 2019, ended the quarter with a loss of $2.8 billion and a full year end result of $6.6 billion in the red. While the 737 Max has been grounded since March 2019 after the fatal crash of Ethiopia Airlines Flight ET32, the Boeing 787 was the more popular product as it delivered 158 units to airlines out of 380.
However, the demand of the Dreamliner is also dropping. The production rate of the aircraft will be reduced from 14 per month to 12 later in 2020.
Boeing President and Chief Executive Officer, David Calhoun, said, “we recognise we have a lot of work to do. We are focused on returning the 737 MAX to service safety and restoring the long-standing trust that the Boeing brand represents with the flying public.
“We are committed to transparency and excellence in everything we do. Safety will underwrite every decision, every action and every step we take as we move forward. Fortunately, the strength of our overall Boeing portfolio of businesses provides the financial liquidity to follow a thorough and disciplined recovery process.”