Boeing’s Big Loss
Boeing released its results for the full 2019 year on 29 January. Gross operating loss was $US1.975 billion and an operating loss of $US6.657 billion was recorded by its Commercial Airplanes division.
This reflects the severity of the financial hit of the 737 Max groundings. Other divisions were profitable.
Total Boeing revenue in 2019 was $US76.559 billion, down about 24 per cent on 2018’s $US101.127 billion and almost entirely attributable to the 737 Max situation..
The company delivered only 380 airliners in 2019 compared to 806 in 2019. 737 Max deliveries ended with the March 2019 grounding with the result that only 127 737s of all models were handed over during the year including a small number of 737NGs and military versions. The company delivered 580 737s in 2018.
Other commercial deliveries in 2019 were seven 747s, 43 767s, 45 777s and 158 787s.
Boeing also stated that the costs associated with the grounding and suspension of production would likely exceed $US18 billion, a significant increase over previous forecasts.
On 28 January it was reported in the financial press that Boeing has secured
loans for more than $US12 billion from over a dozen banks as financial pressures mount due to a production halt of the 737 Max. This is not yet finalised according to reports and Boeing declined to comment.
Reuters reported that Citigroup is leading the transaction and others include JP Morgan, Wells Fargo and Bank of America.
Analysts estimate that Boeing has been losing around $1 billion a month since the grounding.