Boeing faces a 737 Max judgment day as it reports financial results less than 24 hours after ousting one of its most senior bosses
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- Boeing's third-quarter results, due Wednesday morning, will prove one of its biggest tests since two 737 Max planes crashed, killing 346 people, grounding the aircraft around the world and leaving Boeing fighting a reputational crisis.
- The results come the day after a senior executive was ousted and the same day that investigators into the first disaster, involving a Lion Air flight in Indonesia, told victims' families that the plane's design contributed to the crash.
- Previous results have seen Boeing announce billions in losses as it faces lawsuits and demands for compensation from airlines over the crashes and the 737 Max's subsequent grounding.
- Some analysts have also downgraded Boeing's stock, saying they cannot recommend people buy it as the crisis continues.
- Read more stories like this on Business Insider.
Boeing is today facing one of its biggest days in the 737 Max crisis as it reports its results less than 24 hours after the most senior executive in its commercial division was ousted.Boeing's third-quarter results are due on Wednesday morning, the day after Kevin McAllister, the President and CEO of Boeing Commercial Airplanes - the Boeing unit that builds passenger planes - lost his job.Advertisement
McAllister's ouster is the most significant management change since the company was engulfed in crisis after two 737 Max jets crashed and killed 346 people.
The results come as Boeing continues to grapple with the grounding of the 737 Max which has not flown commercially since March, when the second crash occurred. The grounding has led airlines to demand compensation, and in some cases refunds as uncertainty over when the plane can fly again continues.
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Third quarter results also coincide with news that crash investigators in Indonesia told relatives of the first fatal crash, by a Lion Air plane in October 2018, that design issues with the 737 Max plane contributed to the fatal plunge, alongside "deficiencies" in the flight crew's communication.Some analysts are now starting to turn against Boeing, with both UBS and Credit Suisse no longer recommending that investors buy Boeing shares.Credit Suisse analyst Robert Springarm said on Monday that "we can no longer defend the shares in light of the latest discoveries, discoveries which significantly increase the risk profile for investors" after Reuters reported internal messages from a former Boeing pilot who said the Max software was acting erratically for months before the plane started flying.Advertisement
In its second-quarter results, Boeing said that it lost nearly $3 million, on top of a $5 billion already factored in over the continued grounding of the plane around the world.Boeing could announce another charge as delays in getting the plane back in the air continue, CNN reported, citing Cai von Rumohr, an aerospace analyst with investment bank Cowen.Advertisement
He said on Monday that the charges "are apt to be large."
Boeing's previous results also suggested that the Washington state-based aviation giant could soon lose its crown as the world's largest planemaker, as its deliveries fell behind its European rival Airbus. Airbus has not yet posted its third-quarter results.
Boeing will also likely share guidance on when the plane will return to service - a timeline that has been continually pushed back, and is now expected to be pushed into 2020.
Steve Dickson, the administrator of the US Federal Aviation Administration, said on Tuesday that Boeing had made progress with its updates to the plane, but that there was "considerable work to do" before the planes could be certified to fly again.Read more: Pilots and a growing number of airlines are demanding payback from Boeing for its 737 Max disasters - here's the full listAdvertisement
Boeing has said that it wants the planes back in the air by the end of this year, but Europe's aviation regulator, the European Union Aviation Safety Agency (EASA), which is doing its own certification tests of the plane, does not expect the planes to return until January at the earliest, Reuters reported.Get the latest Boeing stock price here.
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