Boeing is already estimating a $1 billion increase in costs related to its troubled 737 Max and has pulled its forecast of 2019 earnings because of uncertainty surrounding the jetliner, which remains grounded after two crashes that killed 346 people.
The $1 billion figure is a conservative starting point. It covers increased production costs over the next few years but does not include the company's spending to fix software implicated in the crashes, additional pilot training, payments to airlines for grounded jets, or compensation for families of the dead passengers.
Chicago-based Boeing Co. said its previously issued full-year guidance didn't account for 737 Max impacts. It plans to issue new guidance at a future date. On a conference call, Muilenburg defended the company after an analyst asked how Boeing got in this spot. The CEO disputed the notion that Boeing engineers and federal regulators may not have fully understood how pilots would interact with new anti-stall software called MCAS.
Preliminary reports indicate that faulty sensor readings triggered MCAS and pushed the nose down in both the Oct. 29 crash of a Lion Air jet off the coast of Indonesia and the March 10 crash of an Ethiopian Airlines Max. Boeing began working on a software fix immediately after the first crash. Tajer said Muilenburg, airline CEOs and regulators should show their faith in the Max by flying on it too, perhaps with their families.
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