737 MAX woes send Boeing to first annual loss since 1997
Boeing's troubled 737 MAX dominated the conversation as the aerospace giant delivered its earnings update Wednesday, remaining the most high-profile fault line for America's largest manufacturer.
Boeing executives acknowledged during a call with investors that the ongoing 737 MAX grounding has been a drag on the company's profits and culture.
“It’s a very challenging moment for Boeing," CEO David Calhoun said Wednesday during his first earnings call since assuming role earlier this month. "We recognize that many of our stakeholders are rightly disappointed in us.”
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Boeing's ledger dipped into the red for the first time in more than two decades as the company recorded its first full-year loss ($636 million) since 1997. The MAX issues continued to weigh down Boeing's results, with the manufacturer saying it expected costs related to the MAX to exceed $18 billion.
The 737 MAX is the best-selling jet in the world, but it has been grounded globally since March 2019 following the second of two crashes that together killed 346 people.
Boeing's whole 737 program has about 4,400 aircraft on back order according to Greg Smith, the company's CFO. He said with such a substantial backlog, he's confident in the long-term viability of the aircraft.
“Although the MAX grounding has presented us with near-term challenges, the depth and breadth of our backlog affords us the time to assess and mitigate longer-term implications," he said.
But, Boeing executives emphasized, their current focus is on getting the 737 MAX fleet back into the air safely, and in full cooperation with global regulators.
Related: Boeing’s deliveries slump amid 737 MAX crisis
The company expects it will take a year or more for the approximately 400 MAX jets that have already been produced to be delivered to airlines. Production of the MAX — which was halted earlier this month — is likely to resume as Boeing gears up to start delivering the MAXes now sitting in storage. Ultimately the manufacturer plans to produce about 57 MAXes each month.
Calhoun, the CEO, also expressed confidence in the plane's outlook.
"The MAX is a sound airplane," he said. "I believe we’ll deliver the safest airplane in the sky.”
The CEO also addressed negative internal communications between employees that became public last year. He insisted that they were not representative of the company as a whole, and assured investors that under his leadership, Boeing will do more to address employee concerns more proactively.
Related:Study: Boeing must be ‘hypertransparent’ to win back trust on 737 MAX
Calhoun added that, although the 737 MAX remains Boeing's top priority, he is bullish about the upcoming introduction of the 777X, which took its first test flight this past weekend. It now will undergo a a series of test flights needed for Boeing to win regulatory approval for the jet to begin flying commercial flights.
“Flying this 777X tested more technology, tested our patience, tested our disciplines in every way you can think of, and we did it successfully," he said. “We will move it through a certification process that will be more rigorous than history has ever seen.”
The first 777-9 deliveries are expected in 2021.
Related:Video: Watch the Boeing 777X test aircraft stretch its wings
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| 4X | Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 4X | Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year. |
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There’s a lot to love about the Amex Gold. It’s a fan favorite thanks to its fantastic bonus-earning rates at restaurants worldwide and at U.S. supermarkets. If you’re hitting the skies soon, you’ll also earn bonus Membership Rewards points on travel. Paired with up to $120 in Uber Cash annually (for U.S. Uber rides or Uber Eats orders, card must be added to Uber app and you can redeem with any Amex card), up to $120 in annual dining statement credits to be used with eligible partners, an up to $84 Dunkin’ credit each year at U.S. Dunkin Donuts and an up to $100 Resy credit annually, there’s no reason that foodies shouldn’t add the Amex Gold to their wallet. These benefits alone are worth more than $400, which offsets the $325 annual fee on the Amex Gold card. Enrollment is required for select benefits. (Partner offer)Pros
- 4 points per dollar spent on dining at restaurants worldwide and U.S. supermarkets (on the first $50,000 in purchases per calendar year; then 1 point per dollar spent thereafter and $25,000 in purchases per calendar year; then 1 point per dollar spent thereafter, respectively)
- 3 points per dollar spent on flights booked directly with the airline or with amextravel.com
- Packed with credits foodies will enjoy
- Solid welcome bonus
Cons
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $6,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
- Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- $120 Uber Cash on Gold: Add your Gold Card to your Uber account and get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an American Express Card for your transaction. That’s up to $120 Uber Cash annually. Plus, after using your Uber Cash, use your Card to earn 4X Membership Rewards® points for Uber Eats purchases made with restaurants or U.S. supermarkets. Point caps and terms apply.
- $84 Dunkin' Credit: With the $84 Dunkin' Credit, you can earn up to $7 in monthly statement credits after you enroll and pay with the American Express® Gold Card at U.S. Dunkin' locations. Enrollment is required to receive this benefit.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year after you pay with the American Express® Gold Card to dine at U.S. Resy restaurants or make other eligible Resy purchases. That's up to $50 in statement credits semi-annually. Enrollment required.
- $120 Dining Credit: Satisfy your cravings, sweet or savory, with the $120 Dining Credit. Earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, and Five Guys. Enrollment required.
- Explore over 1,000 upscale hotels worldwide with The Hotel Collection and receive a $100 credit towards eligible charges* with every booking of two nights or more through AmexTravel.com. *Eligible charges vary by property.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.