Boeing takes almost $5bn hit by 737 Max grounding

Boeing has confirmed that the firm is taking a $4.9 billion financial hit to cover costs related to the global grounding of its 737 Max aircraft.

The charge will be used mostly to compensate Boeing's customers for schedule disruptions and delays in aircraft deliveries, the company said Thursday in a statement.

The return of 737 Max to service in the U.S. and other jurisdictions is expected to begin early in the fourth quarter of 2019, according to the statement.

"This assumption reflects the company's best estimate at this time, but the actual timing of return to service could differ from this estimate," it added.

Boeing's top-selling aircraft model was grounded worldwide after two crashes that cost hundreds of lives.

On March 10, Ethiopian Airlines flight ET-302, which used the Boeing 737 Max, crashed shortly after taking off from Addis Ababa airport, killing all 157 on board.

The plane model was also involved in an October crash outside of Jakarta, Indonesia. All 189 people onboard Lion Air flight JT610 were killed.

Many countries, including the U.S., Turkey, Russia and Iran, began to order the grounding of the plane model in their airspace.

Boeing which has remained confident about the safety of the aircraft had said a software fix would solve the problem.

"We remain focused on safely returning the 737 MAX to service," said Boeing Chairman, President and CEO Dennis Muilenburg. "This is a defining moment for Boeing. Nothing is more important to us than the safety of the flight crews and passengers who fly on our airplanes.

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