Finance - 737 MAX Woes Causes Boeing Loss
The worldwide problems caused by the deadly crashes of two 737 MAX 8 is causing Chicago-based Boeing set aside US$4.9 Billion, a move which will wipe out profits when the plane-maker announces its quarterly results next week.
The money, which is just Boeing's best guess of how much it will need, will be used to compensate Boeing's customers for schedule disruptions and delays in aircraft deliveries. Two 737 MAX 8 aircraft crashed in October of last year and in March of this year, killing 346 people.
"We are taking appropriate steps to manage our liquidity and increase our balance sheet flexibility the best way possible as we are working through these challenges," Boeing chief financial officer Greg Smith.
"The Max grounding presents significant headwinds and the financial impact recognized this quarter reflects the current challenges and helps to address future financial risks," said Boeing chairman and chief executive Dennis Muilenburg.