Boeing 737 Max 8
Boeings earnings are on a downslide as the 737 Max plane sits grounded by regulators around the world, following the two deadly crashes.
Even Boeing is not yet ready to predict how much is at loss. The aviation giant was uncharacteristically uncertain about its financial future on Wednesday. While announcing its worst quarterly results in years.
The company has stopped its popular share buyback program weeks past. It has still not offered a date when the update to the 737 Max 8 update would arrive.
“the timing of return to service for the Max will continue to be paced by on going work with global regulators and our customers,” Boeings chief executive, Dennis A. Muilenberg, said in a conference call with analysis.
However, until the plane is cleared to fly again, a substantial chunk of Boeing’s business will remain on halt.
The company delivered 50 fewer 737 aircraft than it originally planned this quarter; As a result of the grounding of the 737 aircrafts. Which contributed to the decline of more than $1billion in revenue for its commercial airplanes division.
Decision making are now on a day to day basis; Trying to plan for contingencies, Greg Smith, the company’s financial officer noted during the call.
This decision making process is a contrast behavior to Boeings behavior at the beginning of the year, when executives had announced ambitious earnings targets and plans for delivery growth.
The Boeing aircraft is facing major lawsuits and investigations over the accidents. There have been questions on whether the company rushed to finish the Max 8 designs, due to competitive pressure.
Boeing has said it wanted to be ready to ramp up manufacturing once the 737 Max was allowed to return to flight. Factory workers numbers have remained the same, though fewer planes are being produced.
Even suppliers are still in operation like nothing has changed. Without a current clear schedule, Boeing has said it was taking on $1 billion additional costs related to the grounded 737, as well as other expenses associated with the pilot training and the software update.