According to the company, lost sales, reduced production and the compensation payments it was expecting to hand over to date would cost the plane maker $6.6 billion. The company said it's assuming that approval of the plane's "return to service in the USA and other jurisdictions begins early in the fourth quarter" of this year.
WestJet CEO Ed Sims told reporters in May following the company's annual general meeting that the work now being done by Boeing and regulators around the world provides a "clear line of sight" to the eventual lifting of the grounding order. Boeing also said it plans to ramp up production of 737s from 42 per month to 57 per month in 2020, which Melius Research analyst Carter Copeland said was a "positive signal". It was the second MAX plane crash in six months, and almost 350 people were killed between the two crashes.
The sum does not include any provision for lawsuits expected to be filed by the families of the victims.
Southwest Airlines Co (LUV.N) joined USA rivals on Thursday in cancelling more flights until early November due to the continued grounding of Boeing Co's (BA.N) 737 MAX, which has also prompted the low-priced carrier to freeze new pilot hiring.
"The Max grounding presents significant headwinds and the financial impact recognized this quarter reflects the current challenges and helps to address future financial risks", Chairman and CEO Dennis Muilenburgsaid in a statement.
The troubled jets are off Southwest's schedule through November 2 as it remains uncertain when they'll be allowed to fly again, the airline announced Thursday.
Average estimates of analysts compiled by Refinitiv suggested Boeing would book a per-share profit of $1.80 for the second quarter. The figure is an estimate of the amount it will have to pay airlines, such as Ryanair, that fly the plane.
The assumptions behind the accounting charge also provided a glimpse of Boeing's recovery plan for its best-selling jet, which crashed twice in a five-month span and engulfed the U.S. planemaker in one of the worst crises of its century-long history.
The plane's return has been pushed back several times, most recently after Federal Aviation Administration pilots found a new flaw while testing Boeing software changes in a flight simulator.
It would likely take several more weeks for the FAA and other regulators to approve Boeing's work, give pilots additional training, and bring long-parked jets up to flying condition. Boeing also said that it had been forced to cut future services because of uncertainty over the timing of deliveries of 737 MAX planes.
Boeing shares are up 2.1 per cent to $368.50 in early trading, recouping most of yesterday's 2.3 per cent decline. Before the announcement, they fell $8.41 to end regular trading at $361.11.
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