Boeing Co. announced Wednesday that it would stop production of the 777x from 2023 because of certification issues and weak demand. It also disclosed $1.5 billion in unusual costs related to this program. For More Updates Stay Tuned With Moneycompanion.us.
The bell brought down the shares of the planemaker by 4% to $160.32.
The planemaker submitted a certification plan for its 787 Dreamliner program to the U.S regulator. This is a step towards resuming deliveries that were halted nearly a year ago by an industrial snafu, which cost about $5.5 billion.
Boeing’s financial health is dependent on the 787 Dreamliner and 737 MAX. The latter are trying to rebound from previous crises. It has been producing 787 jets at an extremely low rate, while inspecting and repairing structural flaws under intense regulatory scrutiny.
Boeing has “completed all required work on the initial planes and is conducting test flights”, Chief Executive David Calhoun stated. This should be a good news for airlines that have had to cut back on long-haul routes because of delays in delivery.
Calhoun didn’t specify when Boeing would resume 787 delivery on Wednesday. Reuters reported last week that Calhoun had informed key airlines and suppliers of parts that deliveries would resume in second half this year. Continue reading
Boeing confirmed that the first 777X plane was not handed over in time for 2025. However, it said it is still confident in the program. Calhoun stated that Boeing will use the pause in production of 777-9 to increase its 777 freighter capacity beginning in 2023.
Reuters reported last month by Reuters that the Federal Aviation Administration warned Boeing that the existing certification schedules for 737 MAX 10 (and 777X) were “outdated” and did not reflect program activities.
In its first quarter earnings report, the planemaker stated that it is on track to generate positive cash flows for 2022 due to increased deliveries of 737 MAX aircraft. It reported a core loss of $2.75 per share in the quarter, compared to $1.53 per share one year ago. Revenue declined to $13.99billion from $15.22billion.