The global grounding of Boeing’s 737 Max jets will cost the company more than $1bn, the company said on Wednesday.
The jets were grounded after two fatal crashes that killed 346 people and have triggered investigations into the accidents across the world and left Boeing with one of the biggest crises in its history.
In its first quarterly earnings report since the Lion Air and Ethiopian Airlines disasters, Boeing announced it has abandoned its 2019 financial outlook and halted share buybacks in mid-March as it deals with the crisis.
The announcement was a sharp reversal from Boeing’s last earnings report in January, when executives unveiled plans to deliver more than 900 jetliners this year alongside higher sales and profits.
The world’s largest planemaker reported first-quarter revenue and cashflow below sharply lowered Wall Street estimates, largely due to stopping deliveries of the 737 Max jets, which were grounded in March after the two crashes.
The crashes caused regulators worldwide to ground the 737 Max and triggered investigations into the aircraft’s development by federal transportation authorities and the US Department of Justice.
Although safety experts have raised some questions over crew performance in both crashes, the regulatory fallout has been dominated so far by questions over anti-stall software known as MCAS, which Boeing has acknowledged was a common link in the separate chains of events leading to both crashes.
Boeing cut production of the jets following the crashes to 42 aircraft per month, down from 52, and its operating cash flow in the first quarter was about $350m lower than a year earlier.
Boeing also said it booked unspecified charges related to developing a fix for MCAS and pilot training, and was making steady progress toward certification of the software after completing more than 135 test and production flights.
The company said it would be issuing a new forecast in the future when it has more clarity around the issues surrounding the 737 Max.