Boeing lost $2.4 billion in the second quarter from April to June. The American aerospace giant released the figures today, which show a smaller net loss than the same period in 2019. Boeing is currently dealing with the grounding of the Boeing 737 MAX, in addition to the current pandemic, which is affecting new aircraft takeup.
Every aerospace company, be it airlines, airports, or manufacturers, is publishing losses in their financial results as a consequence of the current pandemic. Indeed, just today we saw Heathrow Airport report a loss of £1 billion in the first half of the year as passenger numbers dropped by 60%. However, Boeing was already dealing with another major crisis before the current pandemic.
$2.4 billion loss
The headline figure in today’s Q2 results released by Boeing was a $2.395 billion loss. While the value seems relatively extreme, it marks an improvement from this time last year, breaking from the general industry results trend. Last year, the aircraft manufacturer announced a net loss of $2.942 billion.
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From April to June, Boeing produced a revenue of $11,807 billion, down 25% from the previous year. Commenting on the results, Boeing’s CEO Dave Calhoun said,
“We remained focused on the health of our employees and communities while proactively taking action to navigate the unprecedented commercial market impacts from the COVID-19 pandemic. We’re working closely with our customers, suppliers and global partners to manage the challenges to our industry, bridge to recovery and rebuild to be stronger on the other side.”
Two crises at once
Boeing is currently dealing with two major crises. The first one was already being felt in its results a year ago. Since March 2019, the Airline hasn’t delivered a single Boeing 737 MAX aircraft. This aircraft was to be a massive seller for the American manufacturer. Indeed, the latest figures suggest that 423 undelivered Boeing 737 MAX aircraft are currently awaiting delivery.
However, the company has also been hit by a lack of demand for new aircraft generated by the current COVID-19 pandemic. Many airlines have put off taking new aircraft while the majority of their fleets are grounded.
As such, Boeing delivered just 20 aircraft to commercial customers in the second quarter of 2020. A year ago, in the first quarter since the Boeing 737, MAX was grounded, Boeing delivered 90 commercial aircraft. In the quarter before that, it delivered 169 aircraft in the 1st quarter of 2019. The Boeing 737 MAX was grounded on March 17th, 2019.
According to Boeing, its backlog of 4,500 undelivered aircraft is valued at $362 billion. As part of its results, Boeing confirmed that the first 777X wouldn’t be delivered until 2022. Meanwhile, the production rate of the type will drop to two per month gradually next year. The company will be lowering the production rate of the 787 to 6 per month in 2021.
What do you make of Boeing’s Q2 results? Let us know your thoughts in the comments!