Rising costs from the grounding of its once-bestselling 737 MAX jets have left US aerospace giant Boeing with its first annual loss in net revenue since 1997.
The American plane manufacturer lost $636 million in 2019, after a disappointing fourth quarter which saw a loss of $2.33 per share, the company announced on Wednesday. The annual loss is dramatic compared to Boeing’s results last year, when it posted a profit of $10.46 billion.
The aviation giant said that the financial results were “significantly impacted by the 737 MAX grounding.” Boeing is still struggling to recover from reputational damage after two deadly crashes involving its bestselling airplane killed 346 people.
Global groundings resulted in financial losses for the airlines, which in turn want Boeing to compensate them. Meanwhile, Boeing had to suspend the manufacture of the planes, but it hopes production will be resumed in mid-2020 or even earlier.
According to the plane maker, the halt of production and relaunch of the grounded planes will result in $4 billion of “abnormal production costs” this year. Thus the total cost of the 737 MAX debacle could cost Boeing more than $18 billion.
Despite the revenue loss, Boeing stock rallied almost 3 percent in early trading on Wednesday. However, company shares are down about 9 percent over the past three months.
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