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Boeing delays its newest jet as losses soar

The company Wednesday announced it would temporarily pause the start of production for its 777X passenger jet, which it planned to start delivering to customers by the end of 2023. Demand for long-range and widebody passenger jets, a key to Boeing’s commercial jet business, continues to be hurt by weak demand for international flights during the pandemic.

Demand for Boeing’s freighter aircraft has remained strong, so it will go forward with the recently launched 777X freighter before it starts production of the 777X passenger jet. Boeing will continue to build both the earlier passenger and freighter versions of its 777 jet, known as the 777 Classic. Those models are due to be replaced by the 777X.

Pushing back plans for the 777X passenger jet will result in a total of $1.5 billion of abnormal costs for Boeing starting in the second quarter and continuing until production resumes.

The company also booked $1.2 billion in special charges in the first quarter, including a $660 million charge related to higher supplier costs, higher costs to finalize technical requirements and schedule delays for completion of planes that will be used as the next Air Force One planes. It also includes $212 million in charges related to disruption of business caused by sanctions on Russia related its invasion of Ukraine and a $367 million charge related to supply chain constraints, Covid-19 and inflationary pressures on its Red Hawk military jet.

Even excluding those charges, the company posted a core operating loss of $1.5 billion in the first quarter, much worse than the $353 million operating loss Boeing posted in the first quarter of 2021. Analysts surveyed by Refinitiv had forecast a core operating loss of just $399 million in the quarter.

Shares of Boeing (BA), a component of the Dow Jones industrial average, fell about 4% in premarket trading.

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