Amid financial misery, Boeing defers B777X EIS to 2023

Boeing (BOE, Chicago O’Hare) has confirmed it has pushed back its inaugural B777-9 deliveries to late 2023 due to “an updated assessment of global certification requirements, the company’s latest assessment of COVID-19 impacts on market demand, and discussions with its customers with respect to aircraft delivery timing”. The American manufacturer initially hoped to deliver the first B777-9 in summer 2020. Before this latest announcement, the revised timeline foresaw the B777X’s entry into service in 2022 with operators that will include Lufthansa, Emirates, Qatar Airways, ANA – All Nippon Airways, Cathay Pacific, British Airways, Etihad Airways, and Singapore Airlines. Boeing recorded a USD6.5 billion reach-forward charge related to the B777X programme. It said the revised entry-into-service timeline would not affect the B777/B777X line’s production rate, which will remain at two units per month in 2021. The B777X programme’s gargantuan charge contributed to Boeing’s worst-ever annual financial results – a net loss of USD11.9 billion in 2020 at a -22% operating margin and a USD18.4 billion negative operating cash flow. Boeing delivered just 157 commercial aircraft in 2020, down by 59% from 2019. Revenue from its commercial division halved to USD16.2 billion, while the segment’s operating margin stood at -85.7%. The manufacturer also disclosed that it had USD5.5 billion in outstanding liabilities related to the B737 MAX programme. Boeing reduced its burden by over USD2.3 billion in 2020 through compensation payments, concessions, and other in-kind considerations to customers.