Boeing reported a $4.16 billion loss for the fourth quarter as the financial fallout of production flaws in one of its best-selling planes, the 787 Dreamliner, grew much worse.
The aircraft maker took a charge of $3.5 billion to cover additional delays in delivering copies of its 787 jetliner and compensation for airlines that are still waiting to get their planes.
The company said manufacturing problems with the 787 will add $2 billion in unusual production costs, double an earlier projection.
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Boeing is coming off a year in which aircraft sales rebounded after a slump caused by the grounding of its 737 Max airliner and a pandemic that crippled air travel. The Chicago-based company still finished far behind European rival Airbus in delivering new planes last year, partly because of the 787.
The two-aisle 787 was grounded for more than three months in 2013 by overheating lithium-ion batteries. After design changes, the plane became a hit with both airlines, which appreciated its fuel economy on long flights, and travelers, who liked the bigger windows and more comfortable cabin.
Boeing halted deliveries, however, in late 2020 because of production flaws including gaps where panels of the carbon-composite fuselage are joined. Shortly after resuming deliveries, Boeing stopped them again in May 2021 as other problems emerged, including faulty titanium parts from a supplier, and the company has been unable so far to win Federal Aviation Administration approval for its fixes.
“The rework process is going well — it’s long, it’s disciplined, but it’s going well,” CEO David Calhoun told CNBC. “Our mechanics are learning a ton in the process.”
Airline customers
Boeing’s failure to resume deliveries is causing headaches for airline customers.
Without the 787s that it expected to receive by now, American Airlines has dropped some international flights planned for next summer. American officials say Boeing has agreed to pay penalties for missing deadlines, and they say there could be negotiations over additional compensation if delays drag out much longer.
Source: CNBC
