Sat | Aug 24, 2019

Global ban on Max jets costs Boeing US$4.9B

Published:Saturday | July 20, 2019 | 9:48 AM

The temporary ban imposed by several countries on the Boeing 737 Max planes could cost the American aircraft manufacturer US$4.9 billion.

Boeing says most of the money will be used to compensate customers for schedule disruptions and delays in aircraft deliveries.

The charge is expected to wipe out profits for the world's largest aircraft manufacturer when it posts quarterly results next week.

Boeing is facing one of the worst crises in its history after regulators in several countries, including Jamaica, imposed a temporary ban on the 737 Max aircraft – its newest and fastest selling plane.

The ban came after two 737 Max aircraft crashed – one in Indonesia last October and the other in Ethiopia in March this year -- killed 346 people in total.

Crash investigators have concentrated their efforts on the aircraft's control system and Boeing has been working with regulators to implement a software upgrade.

Facing intense scrutiny over regulatory clearance for the aircraft to fly, Boeing has cut the monthly production rate from 52 to 42 as airlines hold off on purchases.

But in a statement, the company said its "best estimate at this time" is that the aircraft will return to service in the last three months of this year.

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