Boeing to end 747 production, warns of job cuts

Boeing has said it will stop manufacturing its classic 747 aircraft and is considering steeper job cuts than previously announced.

The firm also plans to slow production of many of its planes, including the troublesome 737 Max.

The changes come as the company revealed a loss of $ 2.4 billion (£ 1.8 billion) as the virus depressed demand for air travel.

“The reality is that the impact of the pandemic on the aviation sector continues to be severe,” said Boeing chief Dave Calhoun.

Airlines around the world have responded to the coronavirus pandemic by reducing their fleets and delaying or canceling aircraft orders.

This month British Airways became the latest to say that it was withdrawing all of its 747 aircraft, about 10% of its fleet, citing the drop in passenger demand. Australian airline Qantas also recalled the plane, which turned 50 last year.

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

Boeing said the slowdown may mean deeper job cuts in addition to roughly 16,000 layoffs, about 10% of its workforce, which it has already planned.

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

“We are taking the right steps to ensure that we are well positioned for the future.”

The pandemic has exacerbated the crisis facing Boeing, which was already in trouble after two fatal crashes of its 737 Max plane that killed 346 people.

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

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

He said he hoped to earn 31 a month in early 2022, rather than during 2021 as planned. That would be about half of the company’s production rate before grounding.

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

Fall in sales

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

Last year, it reported a loss of $ 2.9 billion in the same quarter, driven by a charge of more than $ 5 billion related to the grounding of the 737 Max.

The decline in sales was driven by its business unit, which serves passenger airlines. Revenue fell 65% as the company delivered just 20 planes in the quarter, compared to 90 a year ago.

Sales at the company’s defense, space and security unit were essentially stable at $ 6.5 billion.