Boeing to halt 747 production as losses hit $ 2.4 billion

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Boeing has said it will stop manufacturing its classic 747 aircraft as part of a series of announced changes in the face of massive losses.

The company said production of some other planes, including the struggling 737 Max, will be slower than expected.

Boss Dave Calhoun said the company is also considering job cuts in addition to the already announced 10% staff cut.

“The reality is that the impact of the pandemic on the aviation industry continues to be severe,” he said.

As the coronavirus devastated air travel, airlines around the world have responded by reducing their fleets and delaying or canceling aircraft orders.

This month, British Airways became the latest to announce that it is withdrawing all of its 747 jets – around 10% of its fleet – citing declining passenger demand. Australian airline Qantas is among other companies that have abandoned the aircraft, which marked its 50th anniversary last year.

  • BA abandons entire 747 fleet after travel slowdown
  • Boeing job cuts begin to hit nearly 13,000 workers

The pandemic has exacerbated the crisis facing Boeing, already in difficulty following two fatal crashes to its 737 Max aircraft.

The plane has been grounded since last March, costing the company some $ 20 billion. The scandal has led to the ousting of top executives and a series of ongoing investigations.

Boeing has said it has restarted production of the 737, but expects the manufacturing rate to remain low for the foreseeable future as the virus hangs over the industry.

He said he hoped to make 31 a month by the start of 2022 – instead of 2021 as planned. That would be roughly half of the company’s production rate before the grounding.

“While there have been encouraging signs, we estimate it will take around three years to return to 2019 passenger levels,” Boeing said.

Boeing’s $ 2.4 billion loss

Boeing said it lost $ 2.4 billion in the three months ending June 30, with sales falling 25% to $ 11.8 billion.

The drop in sales is due to its business unit, which serves passenger airlines. This division’s revenue fell 65%, as the company delivered just 20 planes in the quarter, down from 90 a year ago.

Revenue for the company’s defense, space and security unit was essentially flat at $ 6.5 billion.

Boeing said the slowdown could mean larger job cuts in addition to the some 16,000 layoffs already planned.

“Our government services, defense and space programs provide us with critical short-term stability as we take difficult but necessary steps to adapt to new market realities,” Calhoun said.

“We are taking the right steps to make sure we are well positioned for the future. “

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