Boeing reported another quarterly loss on Wednesday amid continued weakness in commercial aviation, but said a rebound was within sight with the return of the 737 MAX to service and coronavirus vaccines.
The aerospace giant, which has been in crisis mode since March 2019 when regulators grounded the MAX for 20 months, reported a $537 million loss in the first quarter, its sixth quarter in a row in the red.
“While the global pandemic continues to challenge the overall market environment, we view 2021 as a key inflection point for our industry as vaccine distribution accelerates and we work together across government and industry to help enable a robust recovery,” said Chief Executive Dave Calhoun in a press release.
“Overall, we made important strides this quarter, and we must stay diligent as we navigate through this global pandemic together.”
The aerospace giant, which sealed major contracts to build 737 MAX with airlines during the period, pointed to lower deliveries of its larger 787 “Dreamliner” planes as a drag in the quarter.
Boeing resumed deliveries on the 787 in March following a suspension last fall to address production problems. But lower Dreamliner deliveries were a factor in the 10 percent drop in revenues to $15.2 billion compared with the year-ago period.
US regulators at the Federal Aviation Adminstration approved the MAX to resume service in November. Since that time, Boeing has delivered more than 85 MAX aircraft and 21 airlines have returned the plane to their fleets, Boeing said.
But earlier this month, Boeing notified 16 airlines of an electrical problem with the jets, leading to the grounding of more than 100 MAX planes worldwide.
Calhoun said Boeing is “finalizing the plans and documentation” over a process to return those MAX planes to service. After the FAA approves the process “we expect the work to take a few days per airplane,” he said.
The removal of these MAX planes from service has had limited impact on Boeing’s airline customers thus far because travel levels are still depressed due to COVID-19.
But the head of Southwest Airlines, a key Boeing customer, last week said the problem needs to be resolved quickly because travel will soon significantly pick up.
Calhoun,64, was named CEO in December 2019 as the company reeled from the scandal over the MAX.
Last week, Boeing announced that it raised the retirement age for Calhoun to 70, keeping him in the corner office potentially through 2028.
Boeing reported operating earnings of $405 million in the quarter in its defense, space and security business, but the results in that division were dented by a $318 million hit in one-time expenses of a military jet connected to “COVID-19 impacts and performance issues at a key supplier,” Boeing said.
Shares of Boeing fell 1.4 percent to $239.20 in pre-market trading.