Boeing to take $4.5 billion charge over grounded jet

The charge will cover possible compensation to airlines whose 737 Max jets remain grounded after two deadly accidents.

By Associated Press

David Koenig

FRANCE-ROISSY-CHARLES DE GAULLE-TRANSPORT — Boeing, the maker of the 777 (shown here) and the grounded 737 Max, is working on fixing flight-control software implicated in crashes that killed 346 people.

DALLAS — Boeing says it will take a $4.9 billion charge to cover possible compensation to airlines whose Max jets remain grounded after two deadly accidents.

Boeing said Thursday that the after-tax charge will cause a $5.6 billion reduction in revenue and pre-tax earnings for the April-through-June quarter. Boeing is scheduled to report financial results next week.

Airlines around the world have canceled thousands of flights since March, when regulators grounded the Boeing 737 Max and the company suspended deliveries of new jets.

Boeing is also raising its estimate of Max production costs by $1.7 billion because production will be reduced longer than expected.

It’s unclear when the plane will fly again. Boeing is working on fixing flight-control software implicated in crashes that killed 346 people.

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