Boeing Reports 4Q20 Losses Amid 737 Max Ban LiftingsBy Alicia Arizpe | Wed, 01/27/2021 - 16:28
Boeing suffered a significant impact from the COVID-19 outbreak, the groundings of the 737 Max and the subsequent aircraft order cancellations stemming from those two events, informed the company in its 4Q20 report. In better news, a growing number of authorities are increasingly lifting bans on the controversial 737 Max, with the European Union Aviation Safety Agency (EASA) being the latest to greenlight the plane.
US aerospace giant Boeing had been dealing with a major crisis since 2019, when countries across the globe banned the Boeing 737 Max after two fatal crashes that killed 346 people. The COVID-19 pandemic only added fuel to the fire after passenger traffic plunged to historic lows, leading airlines to cancel aircraft orders they made in greener times. Altogether, Boeing closed 2020 with 650 cancellations, reports CNBC, and had to readjust its production several times throughout the year. Moreover, the planemaker saw a 29 percent drop in revenue during 3Q20, which led it to report a negative cashflow of US$4.82 billion. On Wednesday, Boeing released its final quarterly report for 2020, in which the company saw US$15.3 billion in revenue, 15 percent less year-on-year.
The COVID-19 pandemic and the 737 Max grounding caused Boeing to close 2020 with a historic net loss of US$11.9 billion, after a 24 percent contraction in revenue for the entire year. "2020 was a year of profound social and global disruption, which significantly constrained our industry. The deep impact of the pandemic on commercial air travel, coupled with the 737 MAX grounding, challenged our results," said Dave Calhoun, President and CEO of Boeing.
On the other hand, Boeing might be seeing a fortune reversal as more countries lift their bans on the 737 Max. American Airlines and Aeroméxico returned the aircraft to service in December 2020, with other Latin American governments later following suit. On Wednesday, the planemaker received further good news as European regulators lifted their ban on the troubled aircraft. “We have every confidence that the aircraft is safe, which is the precondition for giving our approval. But we will continue to monitor 737 Max operations closely as the aircraft resumes operations,” said Patrick Ky, Executive Director of EASA.
While Boeing faced a complex 2020, the planemaker remains positive thanks to its US$363 billion-strong backlog that includes over 4,000 commercial airplanes. "While the impact of COVID-19 presents continued challenges for commercial aerospace into 2021, we remain confident in our future, squarely-focused on safety, quality and transparency as we rebuild trust and transform our business," said Calhoun.