Boeing has put the total cost of the two deadly crashes of its 737 Max airliners at nearly $19bn (£14.6bn) and slumped to its first annual loss in more than two decades.

The US manufacturing giant lost $1bn in the fourth quarter as revenue plunged 37% after the worldwide grounding of the 737 Max. The company has suspended new deliveries of the plane in the wake of the biggest crisis in its 103-year history. Over the whole of 2019, Boeing lost $636m.

Boeing set aside a further $9.2bn to cover the costs of airlines that have cancelled thousands of Max flights and towards higher costs related to compensation – doubling its estimate of the total financial hit from the crisis to $18.6bn.

Revenue tumbled to $17.9bn, far below Wall Street’s forecast of $21.7bn, according to a FactSet survey of analysts.

The Max was grounded last March after two crashes five months apart killed 346 people in Indonesia and Ethiopia. The crisis has left Boeing far behind rival Airbus in sales and deliveries of new jetliners, caused layoffs at suppliers, and led to the firing of chief executive Dennis Muilenburg.

“We recognise we have a lot of work to do,” said David Calhoun, Boeing’s newly installed president and CEO. Calhoun is a former General Electric and Nielsen executive who had been on Boeing’s board since 2009.

He added: “Safety will underwrite every decision, every action and every step we take as we move forward. Fortunately, the strength of our overall Boeing portfolio of businesses provides the financial liquidity to follow a thorough and disciplined recovery process.”

Regulators across the world are still investigating the two crashes. Earlier this month, the company released internal emails that showed executives mocking regulators, joking about safety and stating that the plane had been “designed by clowns”.

Calhoun said those messages came from “a relatively small group of folks.”.

“The system didn’t apparently listen or watch for things like that, and it didn’t react appropriately,” he said. “And I have to do everything in my power to make sure going forward that it does. Listening starts with leadership and it starts with me. And I think we need to do more of it. And then slowly, steadily, you change culture.”

Before the crashes the Max was Boeing’s best-selling plane. The company has a seven-year backlog of orders for the plane. The grounding of the plane has had a broader impact on the US economy. Boeing is the US’s largest manufacturing exporter and its suppliers have cut jobs, and profits, as they have lost orders.

Ryanair warned pilots and cabin crew this week that it could close bases and cut jobs because of the Max delays. Earlier this month, parts supplier Spirit AeroSystems announced it was laying off 2,800 employees at its facility in Wichita, Kansas, due to the grounding of the plane.

US airlines that own Max aircraft – Southwest, American and United – have cut flights and don’t expect it back in service until after the peak of the summer travel season. What remains to be seen is how willing passengers will be to fly on the plane.

In December, a survey of more than 2,000 people found that two-thirds of them would wait six months, or never fly, in a Max. Most respondents said they would change aircraft if given the option, according to the Bank of America Merrill Lynch survey.

“I wish the moment was different, but we can get through this moment, and we will get through this moment,” Calhoun said in a call with analysts. He apologised to the families of those who died in the two crashes and said he would do so again “many, many” times in the years ahead. But he said he was confident that the Max would soon return and would prove a popular, and safe, aircraft.

“I’m confident in this airplane. The Max is a sound airplane. We believe we’re going to deliver the safest airplane in the sky and we’re excited to be doing just that. And i know our regulator is as well,” he said.

Associated Press contributed to this story



