Boeing Commercial Airplanes has reported fourth quarter revenues of US$4.7 billion, a year-on-year decline of 37 per cent.
This was driven by lower widebody delivery volume due to Covid-19 impacts, the manufacturer noted, as well as 787 production issues. Higher 737 deliveries and a lower 737 MAX customer consideration charge in the quarter compared to the same period last year provided a partial offset.
Boeing’s fourth quarter operating margin decreased to -161.8 per cent, primarily driven by a US$6.5 billion pre-tax charge on the 777X programme, lower delivery volume, and US$468 million of abnormal production costs related to the 737 programme. This was partially offset by a lower 737 MAX customer consideration charge.
Full year revenue was down 50 per cent year-on-year, to US$16.2 billion, highlighting again the impact of Covid-19.
With that in mind, Boeing said the 737 programme was currently producing at a low rate but expects production to gradually increase to 31 per month in early 2022 with further gradual increases to correspond with market demand. The 787 programme is expected to move to a production rate of five per month in March 2021, at which point 787 final assembly will be consolidated to Boeing South Carolina.
Commercial Airplanes now expects first delivery of the 777X to occur in late 2023 and has recorded a US$6.5 billion reach-forward loss on the 777X programme. The production rate expectation for the combined 777/777X programme remains at two per month in 2021.
Boeing captured orders for 75 737 aircraft from Ryanair and eight 777 freighters from DHL, as well as a commitment for 23 737 aircraft from Alaska Airlines during the fourth quarter. Commercial Airplanes delivered 59 airplanes in that timeframe, with a backlog including over 4,000 airplanes valued at US$282 billion.
“2020 was a year of profound societal and global disruption which significantly constrained our industry,” said Boeing’s president and chief executive officer Dave Calhoun.
“The deep impact of the pandemic on commercial air travel, coupled with the 737 MAX grounding, challenged our results. I am proud of the resilience and dedication our global team demonstrated in this environment as we strengthened our safety processes, adapted to our market and supported our customers, suppliers, communities and each other.
“Our balanced portfolio of diverse defence, space and services programmes continues to provide important stability as we lay the foundation for our recovery. While the impact of Covid-19 presents continued challenges for commercial aerospace into 2021, we remain confident in our future, squarely-focused on safety, quality and transparency as we rebuild trust and transform our business.”