|[Published: Friday July 19 2019]
Boeing paying $ 5bn compensation over 737 MAX crashes
CHICAGO, United States 19 Jul (ANA) - Boeing is taking a $ 4.9bn (£ 3.9bn) charge to compensate airlines following the prolonged grounding of the 737 MAX fleet after two crashes.
The crisis-hit firm said lost sales, reduced production and the compensation payments it was expecting to hand over to date would cost it $ 6.6bn (£ 5.3bn).
The sum does not include any provision for lawsuits expected to be filed by the families of those killed.
The world's biggest plane-maker said the bill would be reflected in its second quarter results in the form of a $ 5.6bn (£ 4.5bn) reduction in revenue and pre-tax profit.
All 737 MAX planes have been banned from flying since March after crashes in Ethiopia and Indonesia that together killed 346 people in a space of five months.
Boeing Chief Executive Dennis Muilenburg tweeted that the company remained focused on safely returning the 737 MAX to service.
"The MAX grounding presents significant challenges for our customers, company and supply chain," he tweeted.
Boeing said it assumes the 737 MAX will return to service in the US and other countries in the Autumn but could not give an exact date.
Such a development would need the approval of world aviation regulators.
Ryanair is among the airlines expected to claim compensation from Boeing.
The airline said on Tuesday that it had been forced to cut future services because of uncertainty over the timing of deliveries of 737 MAX planes.(ANA)
FA/ANA/19 July 2019---------