Boeing reports biggest ever quarterly loss amid 737 Max crisis

Between April and June aircraft manufacturer lost $3.4bn

Full stop: hundreds of Boeing 737 Max jets are grounded worldwide (AP)

Boeing has made a $3.4bn (£2.7bn) second-quarter loss as a result of the Boeing 737 Max grounding.

In the corresponding three months in 2018, Boeing made a profit of $2.2bn (£1.8bn).

The latest variant of the twin-jet plane was grounded worldwide after two fatal crashes killed a total of 346 people.

Payouts to airlines whose planes are standing idle, as well as carriers expecting deliveries of the aircraft, have cost the planemaker $4.9bn (£3.9bn).

In both the Lion Air accident in October 2018 and the Ethiopian Airlines crash in March 2019, an anti-stall system known as MCAS was blamed.

In each case, in response to a faulty instrument reading, the software tilted the aircraft nose down relentlessly as the pilots battled to save the plane.

The Boeing chairman, president and chief executive, Dennis Muilenburg, said: “This is a defining moment for Boeing and we remain focused on our enduring values of safety, quality, and integrity in all that we do, as we work to safely return the 737 Max to service.

“During these challenging times, teams across our enterprise continue to perform at a high level while delivering on commitments and capturing new opportunities driven by strong, long-term fundamentals.”

Last week Ryanair warned it will reduce its rate of growth and cancel some winter flights because of the non-delivery of dozens of Boeing 737 Max aircraft that it was expecting to fly.

Europe’s biggest budget airline has 210 Max aircraft on order. It has a unique, high-capacity configuration, the Max 200, which it appears to be renamed the 8200.

At the Paris Air Show in June, British Airways’ parent company, IAG, signed a letter of intent – a non-binding order – for 200 Boeing 737 Max aircraft for delivery from 2023.

At present 737s are being produced at a rate of 42 per month. Boeing’s figures assume that the production rate will rise to 57 per month in 2020, and that all the aircraft produced during the grounding will be delivered within “several quarters” following the plane’s return to service.

Boeing also warned of more bad news in connection with its latest wide-bodied aircraft, the 777X: “While the company is still targeting late 2020 for first delivery of the 777X, there is significant risk to this schedule given engine challenges, which are delaying first flight until early 2020.”

The manufacturer’s share price was barely unchanged. It had already warned the markets about the expected loss.