Boeing Faces Setbacks
Boeing Again Delays 777X
Boeing (BA) announced a record annual loss yesterday. The airline giant attributed the loss to the coronavirus pandemic as well as the 737 MAX safety crisis that has been ongoing for two years. Boeing also shared news that it will delay the release of its new 777X for the third time. The plane, which is a larger version of the 777 mini-jumbo, is now expected to enter service in late 2023. Progress on the 777X has been slowed by falling demand as well as heightened regulation and certification requirements after the two Boeing 737 MAX jet crashes, which killed 346 people.
Chief Executive Dave Calhoun said Boeing has enough liquidity to manage the challenges it is facing, but he also warned that a rebound will be dependent on vaccine distribution and a jump in air travel. After the report, shares of Boeing fell 4.5% in premarket trading and hit a two-month low of $193. Shares of the plane maker were down 4% at the end of the trading day.
Planning for the Future Amid a Pandemic
Industry analysts expect that Boeing will have to wait until at least 2024 for aircraft deliveries to climb back to pre-pandemic levels. Still, Boeing is making plans for the future. The company expects to resume deliveries of 787s to airline customers before the end of 2021, though it will slow production on the aircraft to five 787s per month.
Boeing also hopes to produce 31 737 aircraft per month by the start of 2022, though some analysts believe this goal is overly optimistic. Despite rising tensions between the United States and China and falling demand for new jets, Calhoun said he was hopeful that plane orders from China would climb back up, which would give Boeing’s sales a lift.
737 MAX Cleared for Flight in Europe
It wasn’t all bad news for Boeing yesterday, as the European Union Aviation Safety Agency, also known as EASA, joined the United States and Brazil in lifting the ban against Boeing’s 737 MAX plane. The announcement marked the end of a 22-month ban on the aircraft after its two deadly crashes. The EASA said regulators are confident that the 737 MAX is safe, but they will continue to closely monitor the aircraft.
The EASA has also requested that Boeing work on the aircraft to make it even safer as it resumes service. That work will include electrical rewiring, software upgrades, maintenance checks, and updates to its operations manual and crew training programs.
Representatives from the EASA said the investigation was independent of Boeing or the United States Federal Aviation Administration, and regulators faced no political or economic pressure to approve the aircraft. A group of European pilots endorsed EASA’s decision.
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