The second-quarter earnings from Boeing will include a $4.9 billion hit after tax to cover the actual and expected expenses related to the issues with the 737 Max.
According to the company the hit includes:
Boeing’s estimated costs to produce the aircraft in the 737 accounting quantity increased by $1.7 billion in the second quarter, primarily due to higher costs associated with a longer than expected reduction in the production rate. The increased 737 program costs will reduce the margin of the 737 program in the second quarter and in future quarters. s
Taking into account the tax and other related charges the 737 Max grounding will reduce the companies second-quarter earnings by $5.6 billion.
The results are expected to tip Boeing into making a loss for the quarter, with further information expected during their second-quarter earnings call on the 23rd.
The quarterly charges do however show some positivity for the company, the production rate of the 737 Max is expected to increase from 42 a month to 57 a month next year and this is being accounted for this quarter.
This adds to news from the Paris Air Show last month that IAG had signed a letter of intent for 200 of the aircraft despite its troubled last 12 months.
Nick Ashwell-Rice has worked in aviation and defence journalism since 2014 whilst also maintaining a career outside of the industry. He has been Editor-in-Chief at Talking Aero since its inception