Boeing posts loss in first quarter as it takes hit on Air Force One work

Boeing has reported a wider than expected first-quarter loss and took another charge on its programme to build two new Air Force One presidential planes after firing a contractor it hired to help perform the work.

The company did not provide a timetable for fixing the latest problem with its 737 Max jet, an electrical issue that has forced airlines to park more than 100 of the planes.

The combination of self-inflicted damage and a coronavirus pandemic that has depressed demand for new planes pushed Boeing to its sixth straight quarterly loss.

However, CEO David Calhoun said the company is at an “inflection point”, with an increase in vaccinations against Covid-19 raising hopes for a rapid recovery in air travel that could translate to aircraft orders.

Revenue was roughly in line with Wall Street forecasts as the company generated cash by delivering more new airliners than it did a year ago.

Boeing continues to say that the fix is simple and will take three or four days per plane once the Federal Aviation Administration (FAA) approves Boeing’s repair method, but airlines including Southwest, American and United have now been without some of their Max jets for nearly a month with no certainty about when they will be able to use them again.

“We still believe that that is in relatively short order, although I will not predict when the FAA is through with its interrogation,” Mr Calhoun said.

Meanwhile, the company is also dealing with problems in its programme to build replacements for the current Air Force One planes, which are specially modified 747 jumbo jets. The programme is not crucial to Boeing’s financial health but carries prestige, building the presidential planes that are recognisable around the world.

Boeing took a first-quarter charge of 318 million dollars (£228 million) related to its 3.9 billion dollar (£2.8 billion) contract with the Air Force for new presidential planes. Boeing fired and sued subcontractor GDC Technics, which in turn laid off about 200 workers and filed for bankruptcy protection this week. GDC, hired for interior work on the planes, filed a countersuit against Boeing.

“We continue to make steady progress on this programme and are working closely with our customer to assess the impact and mitigate risks to the delivery schedule,” Boeing spokeswoman Deborah VanNierop said.

Mr Calhoun said in a memo to employees that while the pandemic continues to challenge the airplane market, the company sees 2021 as a turning point as vaccines are distributed more rapidly. He said Boeing’s defence and space business is providing stability for the company.

Excluding one-time items, Boeing’s loss was 1.53 dollars per share. Analysts expected a loss of 97 cents per share, according to a FactSet survey.

The loss was smaller than the 628 million dollar (£451 million) loss Boeing reported a year earlier, when the pandemic was just starting to hit the airline industry.

Revenue fell 10% from a year earlier, to 15.22 billion dollars (£10.9 billion), nearly matching the 15.23 billion dollars that analysts expected. Boeing generated cash when regulators in the US and other countries allowed the company to resume deliveries of 737 Max jets, which were grounded for nearly two years after two crashes that killed 346 people.

Boeing delivered 77 commercial planes in the quarter, up from 50 in the same period last year, although revenue from those sales dropped.