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Boeing warns of big quarterly losses after blowout incident
Boeing’s financial chief is warning shareholders to brace for a big first quarter loss.
CFO Brian West told at an investor conference Boeing’s commercial aircraft division’s operating profit margin would sink to around -20%.
Production work has slowed and extra costs are racking up due to extra scrutiny on the business following the Alaska Airlines blowout.
It would be its biggest loss margin for two years.
The losses are partially due to compensation due to its airline customers including Alaska Airlines.
Alaska’s CEO Ben Minicucci recently said the short grounding of 737 Max planes directly after the blowout incident will cost it about $150 million.
CFO West said ‘all the things we’re doing around the factory’ to meet stricter requirements is slowing production and adding to costs.
“There are changes that need to happen. There’s no doubt about it,” he said.
“We’re deliberately going slow to get this right.”
Boeing had initially planned to ramp up Boeing 737 Max production this year but that has been curtailed due to FAA audits of its production facilities.
Boeing posted a $41 million operating profit for its commercial aircraft unit in the last quarter with a slender 0.4% profit margin.
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Editor for TravelMole North America and Asia pacific regions. Ray is a highly experienced (15+ years) skilled journalist and editor predominantly in travel, hospitality and lifestyle working with a huge number of major market-leading brands. He has also cover in-depth news, interviews and features in general business, finance, tech and geopolitical issues for a select few major news outlets and publishers.
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