Plane maker says the funds will be paid to airlines over a number of years

Two crashes and the global grounding of Boeing’s 737 MAX commercial airliner led to extensive disruption in the international aerospace industry. WSJ’s Robert Wall explains the continuing effects of the plane’s grounding. Photo: Getty Images

Boeing Co. will set aside about $5 billion to compensate airlines that have suffered because of the prolonged grounding of the 737 MAX plane.

Chicago-based Boeing also faces litigation seeking compensation for families of the 346 people who died in two crashes, as well as higher costs after curtailing production of the MAX following its grounding by global regulators in March.

The costs and the potential timing of the MAX’s return to commercial service will be a key focus of investors when Boeing releases earnings for the second quarter next week.

Shares in Boeing rose 2% after hours on Thursday from their close at $361.11, erasing a 2% decline during regular trading.

Boeing said the $4.9 billion after-tax charge in the June quarter was related to estimates for “potential concessions and other considerations to customers for disruptions.” It said the charge, which takes into account taxes, would result in a $5.6 billion reduction in revenue and earnings for the quarter.

 

Excerpt from WSJ

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