Jack Quann
Jack Quann

15.20 19 Jul 2019


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US aircraft maker Boeing says the grounding of its 737 MAX planes will cost it US$4.9bn (€4.36bn).

The company says this will be reflected in its second-quarter results on July 24th.

This translates to a hit of US$8.74 (€7.78) per share of potential concessions and other considerations - including associated delivery delays.

It says the charge will result in a US$5.6bn (€4.98bn) reduction of revenue and pre-tax earnings.

While the entire estimated amount will be recognised as a charge in the second quarter, the company expects any potential concessions to be over "a number of years" and take "various forms of economic value."

The entire 737 Max fleet was grounded globally in March, following two crashes.

Lion Air flight 610 crashed shortly after take-off from Jakarta, Indonesia last October killing all 189 people on board.

While in March, 157 people died - including Irish engineer Micheál Ryan - when an Ethiopian Airlines plane came down shortly after take-off from Addis Ababa.

Boeing 737 MAX A Boeing 737 Max gives a display during the 2018 Farnborough International Airshow in Hampshire, England | Image: Andrew Matthews/PA Archive/PA Images

The company has since set up a US$100m (€88.6m) fund to help the families of those who died.

Boeing says it is continuing to work with civil aviation authorities to try and get the 737 MAX's back in service.

It adds that these authorities will determine the timing of its return.

For purposes of its financial results, the company assumes that regulatory approval of 737 MAX will begin early in the fourth quarter of this year.

"This assumption reflects the company's best estimate at this time, but actual timing of return to service could differ from this estimate", Boeing says.

Boeing chairman and CEO Dennis Muilenburg says: "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 recognized this quarter reflects the current challenges and helps to address future financial risks."


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737 MAX Grounding 737 Max Boeing Cost Dennis Muilenburg Ethiopian Airlines Indonesia Micheál Ryan

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