Boeing delayed the entry of its wide-body 777X jet into commercial service by another year and posted a record net loss of nearly $12bn for 2020, even as it began delivering the 737 Max to customers last month.
The company will not start delivering the 777X — which can seat 384 passengers — to airlines until late 2023, and has taken a charge of $6.5bn to reflect the programme’s decreased productivity. Several other charges brought the total for the quarter up to $8.3bn.
The aerospace manufacturer attributed the delay to diminished demand because of Covid-19 and customer requests to take planes later, as well as an updated assessment of how long it will take aviation regulators to certify the plane.
“This schedule, and the associated financial impact, reflects a number of factors,” said chief executive David Calhoun. “We remain confident in the 777X.”
The market’s demand for wide-body jets was already softening before the pandemic hit. The outbreak has further deflated the appeal of larger jets to airlines as passengers’ appetite for international travel has lagged behind their return to domestic flights.
The 777X was supposed to enter commercial service in late 2020 before the company pushed that date out twice, most recently in July, to 2022. Previously, the delays were driven by problems with its General Electric engine.
Boeing’s financial results also reflected continued fallout from the 737 Max — which crashed twice in five months, killing 346 people — even as it began re-entering commercial service. The US Federal Aviation Administration lifted its grounding order on the plane late last year, American Airlines added it back to its schedule in December, and Alaska Airlines took delivery of one of the jets this week.
The company posted a fourth-quarter net loss of $8.4bn on revenue of $15.3bn, a 15 per cent drop in revenue compared with the same period a year earlier. The company’s full year net loss of $11.9bn on $58.2bn in revenue, a drop of 24 per cent compared with 2019, plummeted past 2019’s $636m loss. The 2019 net loss had been Boeing’s first annual loss in more than two decades.
“2020 was a year of profound societal and global disruption which significantly constrained our industry,” Mr Calhoun said. “The deep impact of the pandemic on commercial air travel, coupled with the 737 Max grounding, challenged our results . . . Our balanced portfolio of diverse defence, space and services programmes continues to provide important stability as we lay the foundation for our recovery.”