Boeing to take a US$4.9 billion charge over grounded jet

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David Koenig, The Associated Press – July 18, 2019

DALLAS — Boeing says it will take a US$4.9 billion charge to cover possible compensation to airlines whose Max jets remain grounded after two deadly accidents.

Boeing said Thursday that the after-tax charge will cause a $5.6 billion reduction in revenue and pre-tax earnings for the April-through-June quarter. Boeing is scheduled to report financial results next week.

Airlines around the world have cancelled thousands of flights since March, when regulators grounded the Boeing 737 Max and the company suspended deliveries of new jets.

In this file image, workers walk up the steps of a jetway of a new Boeing 737-900ER airplane being delivered to United Airlines as it sits parked in front of Boeing’s expanded 737 delivery centre, Monday, Oct. 19, 2015, at Boeing Field in Seattle. (AP / Ted S. Warren)

Boeing is also raising its estimate of Max production costs by $1.7 billion because production will be reduced longer than expected.

It’s unclear when the plane will fly again. Boeing is working on fixing flight-control software implicated in crashes that killed 346 people.

Tagged Boeing 737 MAX