Boeing May Lose $2.4Bln In 2019 Over 737 MAX Crashes - Bank Of America Merrill Lynch

Muhammad Irfan Published March 19, 2019 | 02:49 PM

US aircraft manufacturer Boeing may lose $2.4 billion in 2019 due to the deadly consequences of two of its 737 MAX aircraft crashing over the span of just five months, the Bank of America Merrill Lynch said in its bulletin for investors

WASHINGTON (UrduPoint News / Sputnik - 19th March, 2019) US aircraft manufacturer Boeing may lose $2.4 billion in 2019 due to the deadly consequences of two of its 737 MAX aircraft crashing over the span of just five months, the Bank of America Merrill Lynch said in its bulletin for investors.

The bank said that, with regard to the aircraft lease cost, the manufacturer would likely lose $500 million in the first quarter of 2019 and $2.4 billion in 2019 in general, given that 371 Boeing 737 MAX planes had already been delivered to customers that were now unwilling to use them.

The analysts stressed that it was difficult to give a more precise estimate since the details of the existing contracts were unknown, and the planes were located in different parts of the world.

Bank of America Merrill Lynch added that because of the 737 MAX crashes, its direct competitor, Airbus Neo, could be sold at a big premium.

Boeing has already lost $1.4 billion due to the crashes, according to the bank. The analysts expect that Boeing will continue manufacturing 52 aircraft monthly in order to prevent a product chain disruption. Bank of America Merrill Lynch added that the situation around investment in Boeing's shares would start improving after Boeing 737 MAX deliveries resumed.

A Nairobi-bound Boeing 737 MAX 8 of Ethiopian Airlines crashed on March 10, killing all 157 people who were on board. The causes of the accident are yet to be determined. The tragedy followed a similar deadly crash of a Boeing 737 MAX 8 in Indonesia in late October, in which 189 people were killed. In the wake of the March crash, aviation authorities and airlines around the world have either grounded their 737 MAX 8 series aircraft or closed their airspace to them.