Boeing to release 3rd quarter results under shadow of 737 Max crisis – Business Insider
Boeing’s third-quarter results, due Wednesday morning, will prove one of its biggest tests since two 737 Max planes crashed, killing 346 people, grounding the aircraft around the world and leaving Boeing fighting a reputational crisis.
The results come the day after a senior executive was ousted and the same day that investigators into the first disaster, involving a Lion Air flight in Indonesia, told victims’ families that the plane’s design contributed to the crash.
Previous results have seen Boeing announce billions in losses as it faces lawsuits and demands for compensation from airlines over the crashes and the 737 Max’s subsequent grounding.
Some analysts have also downgraded Boeing’s stock, saying they cannot recommend people buy it as the crisis continues.
Boeing is today facing one of its biggest days in the 737 Max crisis as it reports its results less than 24 hours after the most senior executive in its commercial division was ousted.
Boeing’s third-quarter results are due on Wednesday morning, the day after Kevin McAllister, the President and CEO of Boeing Commercial Airplanes — the Boeing unit that builds passenger planes — lost his job.
McAllister’s ouster is the most significant management change since the company was engulfed in crisis after two 737 Max jets crashed and killed 346 people.
The results come as Boeing continues to grapple with the grounding of the 737 Max which has not flown commercially since March, when the second crash occurred. The grounding has led airlines to demand compensation, and in some cases refunds as uncertainty over when the plane can fly again continues.
Third quarter results also coincide with news that crash investigators in Indonesia told relatives of the first fatal crash, by a Lion Air plane in October 2018, that design issues with the 737 Max plane contributed to the fatal plunge, alongside “deficiencies” in the flight crew’s communication.
Some analysts are now starting to turn against Boeing, with both UBS and Credit Suisse no longer recommending that investors buy Boeing shares.
Credit Suisse analyst Robert Springarm said on Monday that “we can no longer defend the shares in light of the latest discoveries, discoveries which significantly increase the risk profile for investors” after Reuters reported internal messages from a former Boeing pilot who said the Max software was acting erratically for months before the plane started flying.
Boeing will also likely share guidance on when the plane will return to service — a timeline that has been continually pushed back, and is now expected to be pushed into 2020.
Steve Dickson, the administrator of the US Federal Aviation Administration, said on Tuesday that Boeing had made progress with its updates to the plane, but that there was “considerable work to do” before the planes could be certified to fly again.
Boeing has said that it wants the planes back in the air by the end of this year, but Europe’s aviation regulator, the European Union Aviation Safety Agency (EASA), which is doing its own certification tests of the plane, does not expect the planes to return until January at the earliest, Reuters reported.