The grounding of the company's 737 Max aircraft has resulted in Boeing reporting its first annual loss since 1997. The company has already spent hundreds of millions of dollars trying to remedy the situation, but so far has been unsuccessful in getting its planes back in the air.
For the first time ever, Boeing reported a net loss of $636 million for 2019. The figure is a stark contrast to the $10.5 billion in profit that was reported for 2018. Boeing's core commercial aircraft operations took the brunt of the 737 grounding, reporting a loss of $6.7 billion last year. Total revenues for 2019 had dropped by a massive 24 percent, following the multiple delivery cancellations.
Manufacturing costs for the company ballooned t o$2.6 billion last year, an investment that it has yet to recover from. Boeing did continue to build new jets last year, but it has yet to complete its deliveries due to the groundings. The company reportedly still has around 400 completed aircraft in its warehouses in Washington and Texas awaiting delivery.
Boeing halted its deliveries of its 737 Max aircraft in March. The decision was made after the two fatal crashes that killed a total of 346 people. Global aviation regulators ordered the company's airplanes to be grounded as they launched separate investigations into the two crashes.
It was later discovered that a software issue in the planes' autopilot systems were to blame. The US aircraft manufacturer was forced to pay around $2.6 billion to its airline customers as compensation for the grounding of their planes.
Boeing CEO Dave Calhoun acknowledged in a statement that they still had a lot of work to do fully recover from the crisis. Calhoun reassured stakeholders that the company's strong business portfolio and financial liquidity should allow it to quickly recover from the dire situation.
The company previously revealed that it has so far spent around $19 billion through various transactions related to the 737 Max grounding. This included costs for continued litigation and compensations to the families of the crash victims. Boeing expects that it will likely be spending more money this year as the litigations against it continues. The company's planes have also yet to be given the green light to fly once again.
Boeing previously stated that it expects its planes to be approved to fly again during the middle of this year. The Federal Aviation Administration (FAA) has yet to give a concrete timeline for its approval process. Getting its planes back in the air as soon as possible will be crucial for the company's recovery and its overall bottom line for 2020.
