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Aircraft manufacturer Boeing has reported an annual loss of US$636 million (AU$945 million) for 2019, the first negative result in more than two decades.
The loss compares to the US$10.5 billion (AU$15.6 billion) profit registered the year prior, which was issued only a few months prior to the second crash of the 737 MAX and its subsequent grounding.
Total revenue for the fourth quarter of 2019 was US$17.9 billion (AU$26.6 billion), lifting annual revenue to US$76.6 billion (AU$113.8 billion), delivering a GAAP loss per share of US$1.12 (AU$1.66).
Annual operating cash flow was negative US$2.4 billion (AU$3.6 billion).
According to Boeing, there is a total backlog of US$463 billion (AU$687.8 billion) in orders.
Boeing announced this month that it had suspended the production of the 737 MAX, with the platform grounded in March by regulators after the second of two Max crashes.
The Ethiopian Airlines disaster resulted in the deaths of 346 passengers, which followed the crash of a Lion Air 737 MAX in October 2018 off the coast of Indonesia that killed 189 people.
Boeing president and chief executive officer David Calhoun, who took over from the embattled former CEO just this month, said the company had a lot of work to do to regain confidence of customers and the wider flying public.
“We are focused on returning the 737 MAX to service safely and restoring the long-standing trust that the Boeing brand represents with the flying public,” he said.
“We are committed to transparency and excellence in everything we do. Safety will underwrite every decision, every action and every step we take as we move forward.”
“Fortunately, the strength of our overall Boeing portfolio of businesses provides the financial liquidity to follow a thorough and disciplined recovery process.”
Total revenues for the commercial airplanes business segment for the manufacturer was US$32.3 billion (AU$48.0 billion) for the year, down from US$57.5 billion (AU$85 billion) the year prior. The total annual loss was US$6.7 billion (AU$10.0 billion).
The unit delivered 380 commercial airplanes over the year, compared to 806 in 2018.
Commercial airplanes backlog now includes over 5,400 airplanes, valued at $377 billion (AU$560.3 billion).
The defence, space and security segment was lacklustre, impacted by the widening 737 MAX saga and a NASA commercial crew change.
Fourth-quarter revenue decreased to US$6.0 billion (AU$8.9 billion); full-year revenue for the defence, space and security segment was US$26.2 billion (AU$39.0 billion), down from US$26.4 billion (AU$39.2 billion) the year prior.
During the quarter, the defence, space and security segment received an award for 10 space launch system core stages and up to eight exploration upper stages.
It also received contracts for the re-manufacture of 47 AH-64E Apache helicopters for three countries and the upgrade to the NATO Airborne Warning and Control System fleet.
Backlog in the defence, space and security segment was US$64.0 billion (AU$95.2 billion), 29 per cent of which is for customers outside the US.
More analysis to follow.
Rod Pickin
says:No-one likes to see such a great company as Boeing suffer and at this time they are at the cross roads with pretty awful signage to assist them over the direction of the B737-Max. The shere backlog of orders for this unit weighed up against the public’s perception of it will give the company board many sleepless nights, or should.
When Boeing produced the B767 it proved to be and still is a top aircraft but they forgot that its design below main deck created a nightmare in ground handling;- to achieve a full volumetric load a new ULD had to be designed and built, cargo pallets could only be loaded longitudinally and that was only on the 300 series and above, wide loader JCPL’s had to be manufactured and introduced and ULD dollies had to be reconfigured to accommodate them, all at great expense to the operator! If the aircraft had been designed and built a tad wider in the first place all this hassle would have been avoided, there would have been continuity and flexibility of ground handling operations to compliment all othe wide body A/C in service, even today.and at greatly reduced costs; but that was not a concern to Boeing.
Today, approx, 53 years later Boeing are still producing an aircraft, the B737, that has yesteryear ancient technology downstairs, tops uptop but below we still have handlers crawling on their knees in backbreaking work conditions loading and unloading dead load; hold doors still open inwards and up, not in and slide to the right to open a la the B707; or even out and up so as such it retains a void space, non revenue cost penalty to the operator.
I read that Boeing has sent its designers back to re-consider an intermediate type between the 737 and 777/787. With respect, it is time to move on from the era of the B737, we have better options available to us, we have to keep up with the times, as the saying goes, if changes are not made, the result will be the same.
Peter
says:Yes, sadly Boeing have left the tech enhancements WAY to late!!! The MAX should have been designed from the ground up… not mash up from a 1950’s design!
Boeing missed the opportunity to make an ergonomic flight-deck with their 787’s, instead, sticking with the ancient switches and layout of the old era of thinking, why? in order to parrallel Airbus design, but they did it with a rush to market mentality. Sadly these rushed shortcuts and poor decision making have left Boeing in a very questionable position, with now even the 787’s having whistle-blowers fearing for the 787 structural tolarences/build.
As to why CASA would ever take the legal risk and approve the Max for Aussie skies would mind boggle anyone with common sense.
I will never place my family on the Max aircraft, ever. Considering my employer is getting them (or at least they think they are!) will see me leaving Australia to stay Airbus, is saying something about the seriousness of the Max and the corrupt processes to allow it to even be in the sky at all !
Virgin Australia should be ashamed that they are relying on Boeing discounting the a/c rather than moving to Airbus where they can have the moral high ground and not support bad industry practice.
Chris
says:I agree with you. The only clean sheet aircraft design that Boeing has is the B787 and the rest are rehash of older designs especially the B737. Airbus has 2 clean sheet aircraft designs being the A220 and A350 and 2 newer older aircraft designs being the A320/A321 and the A330.
Unfortunately for Boeing, Airbus now has the upper hand in the 110 to 400 seats market with a range of newer older aircraft and new designed fuel efficient aircraft. Boeing will need to do something with the B737 if it wants to remain competitive with Airbus especially in the 110-250 seat market.
NJP
says:Boeing suffering??? What about the 100’s who died in the two crashes?