Boeing ended 2020 with its best month of the year, delivering 737 Max aircraft after nearly two years and receiving its first big firm order for the jet since it was grounded in March 2019, but Wednesday brought evidence, if any was needed, that the company is far from being out of the woods.
Hit hard by the global grounding of the 737 Max and the precipitous decline in demand for new planes because of the ongoing pandemic, the aerospace giant reported its largest-ever annual loss, closing out 2020 by losing $8.4 billion in the fourth quarter. In all, the company recorded a full-year loss of $11.94 billion, easily its worst.
It wasn’t the 737 Max that dragged the company’s finances down in the fourth quarter but a pretax charge of $6.5 billion tied to the company’s newest plane, the 777X. The company said that the first delivery of the 777X would occur only in late 2023, three years behind the original schedule and a year later than the company had projected just six months ago.
Boeing, it may be recalled, has slowed down deliveries of its 787 Dreamliner aircraft due to quality control concerns with the plane. The company, which has trimmed its production target of the aircraft type to five a month, also had to cut thousands of jobs during the year.
“2020 was a year like no other,” Chief Executive David Calhoun said on an investor call. “Our world, our industry, our business and our communities were facing unprecedented challenges—and we’re still in the midst of it.
“Despite solid progress on the vaccine front, the next six to nine months will remain very challenging for our airline customers and the entire industry,” Calhoun added. “COVID-19 case rates continue to be high and travel restrictions remain in place, putting significant pressure on passenger traffic.”
Calhoun isn’t optimistic that demand will bounce back any time soon. “We expect it will take around three years for travel to return to 2019 levels, and a few years beyond that to return to our long term growth trend,” he said.
EASA Approval for 737 Max
It wasn’t all gloom for the company on Wednesday. The European Union Aviation Safety Agency (EASA) formally approved the return to service of the 737 Max. Regulators in the U.S., Canada and Brazil have already recertified the jet and it has already been pressed into service by five carriers, with Brazil’s Gol being the first. China, the country with the most number of 737 Max aircraft, is yet to unground the aircraft.
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