Boeing, which had earlier this year announced that it would be reducing 19,000 jobs due to the ongoing pandemic and the continued grounding of the Max 737 aircraft, is planning to cut another 7,000 jobs.
“The global pandemic continued to add pressure to our business this quarter, and we’re aligning to this new reality,” CEO Dave Calhoun said in an earnings call on Wednesday. It may be recalled that the company had in August warned of further job cuts because of the steep decline in revenue that it has faced over the last year and a half.
The company expects to have about 130,000 jobs by the end of 2021. It is unclear where the job cuts would occur, or if there will be more job cuts in future. The company posted a loss of US$754 million in the most recent quarter and saw revenue fall by US$5.8 billion, or 29%. The company used up US$4.8 billion in the quarter, double its cash burn in the second quarter.
Air traffic will not return to 2019 levels for at least three more years, Calhoun said, It would take several years for air traffic to achieve the level of growth that had been predicted before COVID-19, he added.
Faced with hundreds of cancellations or deferrals of plane orders, Boeing has in recent months reduced production of all its commercial jets. It is halting production of the 787 Dreamliner in Washington state and consolidating production in South Carolina from 2021. Production of the 747, which is now being built only as a freighter, will stop in 2022.
Good news expected on Max 7MA7: Boeing is optimistic of receiving regulators’ approval for the 737 Max to resume flying. Calhoun said it the company should be able to begin deliveries of the Max jets again before the end of the year. Two carriers – American Airlines and Air Canada have announced plans to fly the 737 Max before the end of the year,
Some of the 450 Max jets the company built during the grounding are no longer wanted by airlines that had ordered them. These will be reconfigured for new customers. The company expects to deliver only about half of the already completed jets by the end of 2021, and the other half in 2022.
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