Boeing reports largest ever quarterly loss following 737 Max grounding | Business
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Boeing reported its largest ever quarterly loss on Wednesday, as the cost of grounding its fleet of 737 Max airliners took its toll.
The company lost $2.9bn in the three months to the end of June, compared to a profit of $2.2bn for the same period last year. Sales fell 35% to $15.75bn.
The 737 Max was Boeing’s best selling aircraft until the fleet was grounded worldwide in March following two fatal crashes.
Last week Boeing said it would take a $5.6bn charge to cover potential compensation to customers. The company also expects the cost of manufacturing the 737 to rise by $2.7bn due to production slowdowns. A $100m fund is being established to compensate the families and communities affected by the crashes.
“This is a defining moment for Boeing and we remain focused on our enduring values of safety, quality, and integrity in all that we do, as we work to safely return the 737 Max to service,” Boeing’s chief executive, Dennis Muilenburg, said in a statement.
“During these challenging times, teams across our enterprise continue to perform at a high level while delivering on commitments and capturing new opportunities driven by strong, long-term fundamentals.”
Regulators across the world continue to investigate the fatal crashes of a Lion Air Max in Indonesia and an Ethiopian Airlines flight in Ethiopia that claimed a total of 346 lives.
Last week a father who lost five family members in the Ethiopian disaster accused the company of “utter prejudice and disrespect” and said Boeing had pursued higher a higher share price and profits “at the expense of the safety of human life”.
The grounding of the 737 Max has had wider consequences for the US. American Airlines, Southwest Airlines and United Airlines all used the Max and have canceled flights into November as a result of the grounding, depressing revenues.
Boeing has predicted that the Max will be flying again by the end of the year and appears to be preparing to change the plane’s name to the 737 8200.
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