Boeing Cuts Production Targets Following Large Quarterly Loss

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Airliners and aircraft producers alike have still been experiencing the impact of the COVID-19 pandemic. As cases continue to rise in the U.S., many companies are struggling to stay afloat as they see massive drops in profit. Boeing is chief among these, as the pandemic has derailed their plans to recover following the grounding of their 737 Max model last year.

Last week, Boeing reported a $2.4 billion loss for the second quarter. This is down from the $2.94 billion net loss a year earlier, following a nearly $5 billion charge on their struggling 737 Max program. The 737 Max was grounded after two fatal crashes last March, which resulted in the loss of 346 lives. Share prices for the company also fell 2.8%, with the company’s total stock price having dropped more than 50% in the last year.

Boeing’s CEO Dave Calhoun stated that the lack of demand due to COVID-19 has been the main cause behind the company’s struggles this year. Already, the company has planned to cut 10% of their 160,000-person staff via buyout packages and involuntary reductions.

The company also fared worse than anticipated by Wall Street experts. Analysts had believed the company would see losses of $2.54 per share, along with $13.6 billion in revenue. In reality, the company posted losses of $4.79 per share, and only $11.8 billion in revenue.

Calhoun has claimed that the company has to deal with customers “calling us every day” to cancel existing 737 Max orders. Of the over 470 planes the company has awaiting delivery, the majority of them are 737 Max jets. As such, Boeing plans to gradually increase production of their 737 Max to 31 a month by 2022, much later than initially planned. They will also cut production of their 787 models to just six a month by next year and will completely end production of their 747 model by 2022.