Boeing Co on Wednesday swung to its first annual loss since 1997 on mounting 737 MAX costs and indicated it would again cut production of its bigger 787 Dreamliner aircraft, currently its main source of cash.

Costs related to the global grounding of Boeing’s once fast-selling 737 MAX reached $14.6 billion in 2019 and the planemaker warned of another $4 billion in charges in 2020 due to the expense of freezing and slowly restarting the jets’ production.

The MAX grounding in March after two crashes that killed 346 people forced the planemaker to freeze production of the aircraft this month and led to the ouster of former Chief Executive Officer Dennis Muilenburg.

“We recognize we have a lot of work to do,” Boeing President and CEO David Calhoun said in a statement. Boeing had previously estimated an $8 billion price tag for the MAX fallout.

Boeing shares rose 3% in premarket trading, as some analysts had expected an even larger charge for 737 MAX costs. The stock has lost about a quarter of its value since early March 2019.

The Chicago-based planemaker has been updating the 737 MAX flight control system and software to address issues believed to have played a role in both crashes.

The US Federal Aviation Administration has suggested that it could approve the MAX to fly again before mid-year, longer than Boeing had initially expected.

Calhoun told CNBC on Wednesday he believes the company can meet the certification timeline.

Boeing’s core operating loss was $2.53 billion, or $2.33 per share, compared with a profit of $3.87 billion, or $5.48 per share, a year earlier.

Analysts on average expected Boeing to post earnings per share of $1.47 in the quarter, though several had predicted a loss amid a wide range of forecasts due to uncertainties over the cost of the 737 MAX crisis.

The company also booked more charges on its military tanker and space programs.

Adding to Boeing’s pain, demand for its bigger and more profitable jet - the 787 Dreamliner - has waned in the face of the U.S.-China trade war, prompting the company to cut production, hurting cash flow at a time when its debt is mounting.

Boeing, which is producing the 787 Dreamliner at 14 aircraft per month, said in October it expects to lower the production in late 2020 to 12 per month, amid a drought of orders from China.

The company now expects to further lower 787 Dreamliner production to 10 per month in early 2021.

Boeing reported negative free cash flow of $2.67 billion for the fourth quarter ended Dec. 31, compared with a positive free cash flow of $2.45 billion a year earlier.

The MAX charges include $8.3 billion to compensate airline customers that are canceling flights and scaling back growth plans in a hit to profits while their MAX jets remain grounded.

“The largest positive here is that the charges booked in the quarter came in well below our expectations,” Credit Suisse analyst Robert Spingarn wrote in a note.

Boeing CEO David Calhoun said on Wednesday he was “confident” China could contain a viral outbreak that has prompted airlines to cancel flights and governments to warn against travel to the country.

The death toll from viral outbreak originating in the central city of Wuhan has risen to 132 and while nearly 6,000 have been infected across China, a scale that exceeds the 2002 outbreak of Severe Acute Respiratory Syndrome (SARS).

Cases have been reported in the United States and elsewhere prompting authorities to monitor passengers arriving from China for signs of illness.

“The experience with SARS in a much earlier timeframe, and the protocols that were established, I believe, will contain this at a much faster rate than it would have otherwise contained it without that experience,” Calhoun said on CNBC.

And the virus will not have a “long-term effect” on travel to China, the newly installed Boeing chief said following the Wednesday morning earnings release.

China is a key customer for Boeing but weak demand for new aircraft blamed in part on trade wars with the United States has battered the aircraft maker at a time when it is dealing with the crisis in the wake of two deadly crashes of its top-selling 737 MAX.

The company posted its first annual lost in more than two decades, halted production of the top-selling MAX as the grounding of aircraft has dragged on, and on Wednesday announced it would again cut production of its 787 Dreamliner.

Agencies