Boeing to cut staff, plane output as pandemic batters airline industry

AFP
Boeing announced sweeping cost-cutting measures yesterday after reporting a first-quarter loss of US$641 million following the hit to the airline business from the pandemic.
AFP

Boeing announced sweeping cost-cutting measures yesterday after reporting a first-quarter loss of US$641 million following the hit to the airline business from the coronavirus pandemic.

The aerospace giant plans to reduce its workforce by 10 percent through a combination of voluntary and involuntary layoffs and will slash production of its main commercial planes, including the 787 and 777, Chief Executive David Calhoun said in a message to employees that accompanied an earnings release.

“The aviation industry will take years to return to the levels of traffic we saw just a few months ago,” Calhoun said. “We have to prepare for that.”

Calhoun said the job cuts would be deeper — more than 15 percent — in commercial airplanes and services, as compared with defense and space systems, where the business has been more stable.

The quarterly loss of $641 million compared to profits of $2.1 billion in the year-ago period. Revenues fell 26.2 percent to US$16.9 billion.

Total debt at the end of the quarter was US$38.9 billion, up from US$27.3 billion at the end of December.

Calhoun said the belt-tightening was needed to maintain adequate liquidity at a time its revenues are depressed, adding that the company is “exploring potential government funding options” in the wake of COVID-19.

Boeing has previously called for US$60 billion in government support for the US aerospace industry. Federal relief legislation includes US$17 billion aimed at Boeing. Calhoun has previously balked at the idea of the US taking a stake in Boeing.

Boeing said the pandemic crisis has hit demand for new planes and services.

Boeing to cut staff, plane output as pandemic batters airline industry
Reuters

Grounded Southwest Airlines Boeing 737 MAX 8 aircraft parked at Victorville Airport in the US. Boeing announced sweeping cost-cutting measures yesterday after reporting a first-quarter loss.

Special Reports
Top