Opinion | Boeing’s charge is only the end of the beginning
Boeing Co.’s willingness to put a price tag on its 737 Max crisis and set a firmer timeline for the plane’s return is a sign it sees those troubles as closer to being resolved. The risk is that the company is still the most optimistic one in the room.
Boeing late Thursday announced it would take a $4.9 billion after-tax charge in the second quarter to reflect its estimate of compensation owed to airlines that have had to scramble to adjust schedules as the Max’s grounding enters its fifth month. That estimate is based on an assumption that regulators will begin approving the Max’s return to service in the fourth quarter and that Boeing doesn’t have to make additional cuts to its production rate. This is a contrast to Boeing’s April earnings update, when it suspended full-year guidance and declined to provide a timeline for the Max’s return. It could have just reiterated that sense of uncertainty this go-around. The fact that it didn’t is likely a big reason why the stock is up in early trading.
