Boeing’s profits more than halved in the last three months as the company struggled to recover from two fatal crashes of its top-selling 737 Max aircraft and current trade disputes took their toll.
The company, which still expects the troubled 737 Max jet to return to service by the end of the year, also said it plans to cut production of its wide-bodied 787 Dreamliner, a move that reflects the effect of global trade tensions.
The company said slowed production of the Max will cost an additional $900m on top of $2.7bn loss of income already anticipated. Overall revenue for the quarter dropped 20% – less than investors feared. Boeing shares, which have dropped 20% since the Max was grounded in March, rose 3%.
The drop in profits comes as Boeing announced that Kevin McAllister, head of its commercial jetliner division, is leaving the company after just three years at the job.
McAllister’s exit comes less than two weeks after chief executive Dennis Muilenburg, who is scheduled to testify before Congress next week, was stripped of the company’s chairmanship.
Muilenburg’s demotion followed a further hit to Boeing’s reputation for safety last week when published messages between two test pilots showed that Boeing knew about problems with the 737 Max’s MCAS anti-stall system three years before the crashes in Indonesia and Ethiopia, killing 189 and 157 respectively.
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The exchanges contradict Boeing’s previous position that it had no idea the system was unsafe. In the messages from 2016, simulator pilot Mark Forkner complained MCAS was acting unpredictably. “It’s running rampant,” he said.
Separately, aviation authorities in Indonesia have briefed family members on their findings about the crash of Lion Air flight 610 before the release of the final accident report on Friday.
Investigators from the Indonesian National Transportation Safety Committee in Jakarta said systemic design flaws in the 737 Max were compounded by errors by the plane’s pilots, who had not been sufficiently instructed on how to handle MCAS malfunctions.