Aircraft manufacturer with huge minus
Boeing loses $212 million in Russia alone
4/27/2022, 7:22 p.m
Boeing experiences a very difficult quarter and presents lousy numbers. This also has something to do with the war in Ukraine, but by no means only. Several trouble spots keep the aircraft manufacturer in suspense. The reaction of the stock exchanges is clear.
The Ukraine war, problems with the long-haul aircraft 777X and higher costs for the construction of the new presidential plane Air Force One have brought the US aircraft manufacturer Boeing billions in losses. The group announced a loss of 1.2 billion dollars (around 1.1 billion euros) for the first quarter of the year, about twice as much as in the previous year. Sales declined eight percent to $14 billion compared to the same quarter last year. In response to the bad numbers, Boeing shares fell on Wall Street. The first quarter was characterized by new challenges, said CEO Dave Calhoun.
Among other things, Boeing had to postpone the planned start of the first deliveries of the 777X again. Originally, the first machines of this type should have been delivered as early as 2020, most recently Boeing was aiming for the end of 2023 – now it should be 2025. The aircraft manufacturer cited a new assessment of the time it would take to meet the certification requirements as the reason for the renewed postponement. The delay will result in an additional cost of $1.5 billion.
In addition, the Airbus rival continues to groan under problems with the long-haul jet 787 “Dreamliner” and difficulties with the new US presidential machine. In the first quarter of the year, additional costs of 660 million dollars were recorded for the construction of the new Air Force One. Boeing justified this with higher supplier costs, higher costs in meeting the technical requirements and delays in deadlines. Boeing is currently building two planes for the US President.
Ukraine war exacerbates problems
Calhoun emphasized that Boeing was making progress on the crisis-ridden “Dreamliner”. The problem aircraft has not been able to be delivered as planned for months due to persistent manufacturing defects, which has already led to production cutbacks and expensive compensation payments to customers. According to CEO Calhoun, Boeing has now submitted a plan to fix the problems with the US Federal Aviation Administration (FAA). However, he did not say when deliveries will resume.
Costs of $212 million were incurred in Russia’s war of aggression against Ukraine. Russia stopped services to Russian customers because of the war. Investors reacted disappointed to the poor quarterly figures. Boeing shares fell temporarily by more than 10 percent on Wednesday. Experts had expected a significantly lower loss.