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Boeing halts MAX deliveries, reports sixth straight quarterly loss

written by Hannah Dowling | April 29, 2021
737 MAX Family in flight (Boeing)

Boeing has announced it will officially halt future deliveries on its embattled 737 MAX jets until it has resolved the numerous electrical faults that have been located within the jet’s cockpit.

Simultaneously, the US Federal Aviation Administration officially released its airworthiness directive stipulating the grounding of 109 in-service 737 MAX jets around the world, in a move that was previously announced last week.

The directive states that all affected jets must “remain on the ground while Boeing continues to develop a proposed fix” to the multiple electrical faults located in the jets’ cockpit.

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The electrical faults involve a lapse in the grounding capabilities of some electrical circuits located in the cockpit. Grounding capabilities are vital in order to maintain a user’s safety in the event of a surge of voltage that could otherwise result in a shock or electrocution.

The fault was initially thought to be contained to the cockpit’s backup power control system.

However, the FAA stated that “subsequent analysis and testing showed the issue could involve additional systems”, including the standby power control unit, a circuit breaker panel, and main instrument panel.

In a conference call with analysts, Boeing CEO Dave Calhoun stated he was unsure exactly when the mechanical problems with the MAX will be fixed, and confirmed that no new MAX aircraft will be delivered until the problem is appropriately solved.

Boeing has not confirmed how many built, but as-yet undelivered, MAX aircraft are affected by the manufacturing faults.

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Before this most recent hiatus in MAX deliveries, Boeing was already dealing with a backlog of undelivered jets following the 20-month long global grounding of the jet in light of two fatal crashes on the aircraft type.

The crashes were ultimately deemed to have been largely caused by faults in the MAX’s unique operating system – MCAS.

Despite Wednesday’s announcement of a further delay in deliveries while the electrical issues are resolved, Calhoun expects to “catch up on deliveries over the balance of the year”.

Boeing still has a backlog of around 400 undelivered MAX aircraft.

The Boeing boss also stated he anticipates China, one of the last regulatory jurisdictions to lift its ban on the MAX, will do so by the second half of 2021.

It comes as the US planemaker reported its financial results for the first three months of 2021, in which it saw its sixth consecutive quarterly loss.

The planemaker reported a net loss of $561 million for Q1 2021 on revenue of $15.2 billion. The results were marginally ahead of analyst’s expectations.

Impacting the results was a $318 million pre-tax charge related to its ongoing legal battle against subcontractor GDC Technics over the high-profile Air Force One refurbishment project.

Calhoun said he anticipates the company to return to positive cash flow in 2022.

During the results announcement, Boeing also reaffirmed its decision to reduce its production rate of 787 Dreamliners to below five per month, following the consolidation of its Dreamliner production lines to its South Carolina factory.

Boeing has officially announced in October that it will move the rest of its 787 Dreamliner production from its Seattle-based Everett plant to its factory in South Carolina by mid-2021.

Boeing said that consolidating to a single site would improve operational efficiency amid this COVID-19 downturn, and better position the company for post-crisis recovery.

Boeing likely has to account for even more stringent quality control measures, particularly in light of a string of manufacturing flaws that have been located in undelivered 787s since mid-2020.

Meanwhile, the planemaker said it is still on track to deliver its first 777X mini-jumbo in late 2023, following a number of delays to the program, and will look to produce two 777/777X jets per month.

Boeing halts MAX deliveries, reports sixth straight quarterly loss Comment

  • AlanH

    says:

    They should can the 737MAX project altogether, lick their wounds, go back to the drawing board (how’s that for a mixed metaphor!) and develop their new wide-body NMA.

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