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737 Max Crisis Hangs Over Boeing's Q2 Results



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New York: Boeing may report its biggest loss ever on Wednesday (July 24), under US $ 3 billion. There. 5.6 billion in costs so far due to the crisis surrounding the 737 max aircraft.

The top-selling plane is grounded worldwide since the 13th after a second devastating crash. The catastrophe of Ethiopian airlines that killed 157 passengers and crew came on the heels of a Lion Air crash last fall killing 189 people.

How does the Max Crisis affect the bottom line?

The second quarter's Boeing results are likely to be ugly after announcing last week's giant resident giant it would set aside US $ 1 million. There. 5.6 billion US dollars There. $ 4.9 billion after taxes to compensate for canceled flights and delays in flat delivery.

The move could result in a net loss of more than $ 3 billion for the second quarter, judging by analyst estimates on S&P Capital IQ.

Read: Chinese carriers, Ethiopian Airlines suspend the use of Boeing 737 Max 8 aircraft crash

Read: Boeing receives 4.9 billion dollars fee for prolonged grounding of 737 max planes

The income of Boeing is projected to be US. There. $ 19.2 billion, a drop of more than 25 percent compared to the same time last year was hit by the hassle of delivering the Max.

What is the total cost of Max Crisis?

The cost of the Max Crisis of about $ 8 billion, but the total hit will not be known for some time.

The biggest hit (US $ 5.6 billion) is for compensation to Boeing customers whose operations are impacted by the grounding of the planes, forcing airlines to cancel flights this fall.

Boeing said the compensation was paid last week in a "various kind of economic value", which means that it could pay refunds for future flat orders or maintenance and not just cash.

The manufacturer has also recognized the cost of $ 2.7 billion in cost to cut its production from the 737 to 42 per month from 52.

But the company has retained employment levels despite reduced production, resulting in lower profit margins.

Will there be other costs?

Of course. Boeing faces many lawsuits filed by victims of the two crashes. The company announced plans to grant US funding. There. $ 100 million to victims and communities affected by the accidents, but this will not be the end of history.

This may also include regulatory penalties, including a criminal investigation by the United States. There. Justice Department.

Ratings agency Moody's and Fitch on Monday lowered the outlook on Boeing's debt to "negative", citing the maximum situation, which Fitch said to make Boeing's reputable standing a "watch next year or more."

What is the status of the investigations?

Aviation regulators in multiple countries continue to investigate the causes of the Ethiopian Airlines and Lion Air crashes.

US $ There. Criminal investigators investigate the Boeing's flight-handling system decisions linked to both crashes, known as the maneuvering characteristics of augmentation system or MCAS.

Read: Boeing says sorry for Max 737 crashes, promises to teach lessons

Read: The big challenge of winning back confidence in the Boeing 737 Max, a commentary

Looked Why Boeing has not developed special training for pilots on the MCAS, and why a "disagree light" system that was supposed to signal a problem in this system has been sold as a special feature rather than an important piece of security, A source told AFP.

What is the status of the fix to the 737 MAX?

Boeing continues to work on modifications to the MCAS to get the planes back into the air.

The Aerospace Giant is also developing a training program for pilots and working to address problems with a microprocessor that was identified during the US. There. Federal Aviation Administration simulator in June.

Boeing is expected to present its fixes to regulators in September, according to industrial sources.

When will the 737 Max fly again?

Boeing last week set a target date early in the fourth quarter to start receiving US regulatory approval. There. And other authorities.

Analysts consider this time frame very ambitious for the global fleet, although the United States and Canada could move more quickly than other countries.

Will the Boeing Rename the 737 Max?

Some marketing experts think that rebuilding the Max could benefit Boeing. So far, the Boeing has not made any changes.

"Our immediate focus is to return the 737 MAX to the relaunch and re-earning of air travel and the traveling public," a spokesman said, "but have no plans to change the name of the 737 Max. . "

Will the Max crisis affect the Boeing's other programs adversely?

Boeing executives have been charged 777x flat on issues with the engine, developed by General Electric. A flight test on the flat long-troll that was planned for the summer was pushed back to the end of the year.

However, industrial sources said that the FAA had also stepped up the 777X in light of the Max.

Boeing is also developing a new model aircraft (NMA) for medium distances that generated interest from major carriers, eager to see an alternative to a plane of rival Airbus.

A spokesman from Boeing, "We continue to have some effort on NMA, including a team dedicated to the evaluation of the business case," but the maximum return to the max to the air is the top priority.

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