Boeing reveals cost of 737 MAX grounding
Boeing has confirmed it will take a $4.9 billion hit to cover costs related to the grounding of its 737 Max aircraft.
The aircraft has been grounded following two fatal crashes – a Lion Air crash in Indonesia in October and an Ethiopia Air crash in Ethiopia in March, which together killed 346 passengers and crew.
The crashes were blamed on a fault in~the aircraft’s control system~and Boeing has been working on a software upgrade.
The aircraft manufacturer is due to releases its second-quarter 2019 results on July 24.~
It said for purposes of the second-quarter financial results, the company has assumed that regulatory approval of 737 MAX return to service in the US and other jurisdictions will begin early in the fourth quarter 2019.
"This assumption reflects the company’s best estimate at this time, but actual timing of return to service could differ from this estimate," it said.
Boeing Chairman, president and CEO~Dennis Muilenburg said: "We remain focused on safely returning the 737 MAX to service. This is a defining moment for Boeing. Nothing is more important to us than the safety of the flight crews and passengers who fly on our airplanes.
"The MAX grounding presents significant headwinds and the financial impact recognised this quarter reflects the current challenges and helps to address future financial risks."
Boeing chief financial officer and executive vice president of enterprise performance and strategy~Greg Smith~added: "We are taking appropriate steps to manage our liquidity and increase our balance sheet flexibility the best way possible as we are working through these challenges.
"Our multi-year efforts on disciplined cash management and maintaining a strong balance sheet, in addition to our strong and broad portfolio offerings, are helping us navigate the current environment."
Bev
Editor in chief Bev Fearis has been a travel journalist for 25 years. She started her career at Travel Weekly, where she became deputy news editor, before joining Business Traveller as deputy editor and launching the magazine’s website. She has also written travel features, news and expert comment for the Guardian, Observer, Times, Telegraph, Boundless and other consumer titles and was named one of the top 50 UK travel journalists by the Press Gazette.
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