The crisis surrounding Boeing’s 737 Max jet showed its impact on the company’s profits as earnings fell by 21% in Q1.Lower profits and revenue were also reported. Before the crisis began, the company was expected to release better performance reports. However, Boeing has stated that all bets are off till 737 Max fleet returns.
The share purchase program from the market has also been put on hold. The fixed costs spent in making 737 Max airplanes were at least higher by $1 billion, due to the work required to fix various issues. Production has slowed down from 52 to 42 planes a month. Executives are unable to answer when the famous airplane would be able to continue deliveries and rejoin the fleet.
A safety feature causing the nose of the airplane to dip before crashing is suspected to be the culprit. It is being redesigned to eliminate this flaw.
Dennis Muilenberg, CEO of Boeing has stated that the company’s primary focus is on safety and returning the airplane back to the fleet. They are on a mission to earn back lost customer confidence.
Boeing has stated that it flew over 130 test flights, to test out the software fix. The CEO has flown 2 of them personally.
He stated that Boeing was working along with pilots and customers to reassure them of their safety. But it continues to remain a challenge.
Muilenberg said he was confident that the certification tests by aviation authorities and Boeing was spotless with no gaps slipping through. He seemed convinced that the new software fix would reinstate the 737 Max’s position as the safest airplane in the world.
However, Boeing is far from broke with cash reserves of more than $7 billion. Current orders stand at over $480 billion for over 5500 jets. Boeing shares moved slightly higher after the report.
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