Boeing suffers $1-billion hit from 737 MAX aircraft crisis

NEW YORK (AFP) – Aviation giant Boeing has suffered a $1 billion hit to its bottom line amid the crisis over its 737 MAX aircraft, grounded worldwide after two deadly crashes, the company said Wednesday.

In its first quarterly earnings report since entering crisis mode, Boeing also withdrew its 2019 profit forecast due to continued uncertainty about when the grounded jets will return to the skies.

Boeing has been under scrutiny since the March 10 crash of an Ethiopian Airlines jet, which along with an October Lion Air crash, claimed 346 lives.

Regulators grounded the plane worldwide following the second crash, a move that also forced the company to halt new deliveries of its most-ordered plane, denting revenues.

Company executives sketched out the steps needed to return the 737 MAX to service – including a fix to the flight software system implicated in the crashes – but offered no timetable.

Asked pointedly during a conference call with analysts for an explanation of what happened, the executives defended Boeing's design and engineering practices despite negative news exposes criticizing the company's operations and commitment to safety.

''I can tell you with confidence that we understand our airplane, we understand how the design was accomplished, how the certification was accomplished and we remain fully confident in the product that we put in the field,'' Chief Executive Dennis Muilenburg said in a conference call with analysts.

''There was no surprise, or gap or unknown here, or something that somehow slipped through a certification process.''

But Muilenburg acknowledged the need to win back public trust and said the firm would enlist the help of pilots to reassure anxious customers, adding that ''the bond between the passenger and the pilot is one that is critical.''

The company's share price climbed following the earnings report, reflecting relief that the financial damage from the 737 MAX crisis was not worse.

Given Boeing's size, the financial hit to the company has been ''modest so far,'' S&P Global Ratings said, but warned that the cash drain will continue until the company can resume deliveries.

The US aerospace giant reported $2.1 billion in profits in the first quarter, a decline of 13.2 percent from same period a year ago due in part to the $1 billion hit from the 737 program. Revenues dipped 2.0 percent to $22.9 billion.