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Boeing closed the books on a bruising 2020 by announcing another unpleasant surprise on Wednesday: a $6.5-billion hit from delays to its new 777X plane that exacerbated the aerospace giant's annual loss.
Boeing's 777X completed its maiden flight on Saturday. The plane is world's largest twin-engine jet and is still awaiting regulatory approval. Regulators are expected to scrutinize the plane more. The Boeing 777X is the latest series of the long-range, wide-body, twin-engine Boeing 777 family from Boeing Commercial Airplanes.The 777X features new GE9X engines, new composite wings with folding wingtips, greater cabin width and seating capacity, and technologies from the Boeing 787.
Boeing, which saw its revenues ravaged by the commercial airline downturn sparked by the COVID-19 crisis and the 20-month grounding of its 737 MAX model, now expects first deliveries of the wide-body 777X in late 2023, compared with the earlier timetable of 2022.
The accounting for the 777X prolongation pushed Boeing's fourth-quarter loss to $8.4 billion, plunging its tally for all of 2020 to $11.9 billion in the red, its biggest ever annual loss.
The past year was one of 'profound societal and global disruption which significantly constrained our industry,' said Chief Executive Dave Calhoun.
'The deep impact of the pandemic on commercial air travel, coupled with the 737 MAX grounding, challenged our results.'
In light of radically worsened market conditions, Boeing has taken a hacksaw to costs, announcing job cuts of some 30,000 employees over two years.
The company also completed a $25-billion bond offering to provide liquidity to ride out the downturn.
Boeing executives emphasized that they expect a long-term recovery in travel demand, but reiterated that it will take about three years for activity to return to pre-pandemic levels.
They cautioned that profit margins will be under pressure until demand returns and the company is able to ramp up plane production.
'I'm quite optimistic,' Calhoun said in a conference call with analysts.
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'There's nothing about the market right now that has me switched off on that, but we are talking about 2023. It's going to take that long for us to sort of work our way out of the COVID world.'