737 MAX Woes Hurt Boeing Profits

Boeing announced on Thursday that second-quarter earnings would be dented by US$4.9 billion in one-time costs to compensate airlines for disruptions due to the grounding of the 737 MAX aircraft.

Profits will also be weighed down by another US$1.7 billion in costs due to the 737 MAX's lower production rate, the company said in a statement after the stock market closed.

The disclosures demonstrate the increasing financial toll that the 737 MAX crisis is taking on the company.

The MAX has been grounded since mid-March following two crashes that killed 346 people. Boeing said Thursday its "best estimate" is that the planes will return to service "early in the fourth quarter."

"We remain focused on safely returning the 737 MAX to service," said Boeing chief executive Dennis Muilenburg.

"The MAX grounding presents significant headwinds and the financial impact recognized this quarter reflects the current challenges and helps to address future financial risks."

Separately, Southwest Airlines on Thursday again pushed back its target date for returning the Boeing 737 MAX to service, citing uncertainty about when regulators will permit the jet to fly. (AFP)