BA Boeing Co

By Doug Cameron and Andrew Tangel 

Boeing Co. plans to cut jetliner production and 10% of its workforce in response to the airline industry's coronavirus-driven crisis, but said it has sufficient funding options to adapt.

Travel bans and restrictions are expected to halve global air travel in 2020, with an uncertain recovery spread out over several years that has left airlines unwilling or unable to take new planes.

The U.S. aerospace giant on Wednesday said it would halve output of its 787 jetliner to seven a month after an initial dip to 10 from 14, and resume 737 MAX output at a low initial rate, rising to 31 a month. It is also trimming 777 production.

Earlier this month, rival Airbus SE said it was cutting output by a third.

"The pandemic is also delivering a body blow to our business -- affecting airline customer demand, production continuity and supply chain stability," Chief Executive David Calhoun said in an employee memo. "The demand for commercial airline travel has fallen off a cliff."

Earlier this week, Mr. Calhoun said Boeing didn't expect air travel to return to 2019 levels for two or three years, highlighting global aviation's rapidly evolving crisis.

Boeing burned through $4.7 billion in cash in the first quarter and reported a loss as lower plane deliveries and sales of spares combined with the impact of temporary factory closures and the continuing impact of the 737 MAX crisis.

The company reported a loss of $641 million compared with a profit of $2.15 billion a year earlier. The $1.70 loss per share compared with a year-ago profit of $3.16 and the $1.31 consensus among analysts. Sales fell to $16.9 billion from $22.9 billion.

The company ended the quarter with $15.5 billion in cash. Facing a liquidity drain, Boeing has been considering applying for federal stimulus help, but didn't detail what type -- and how much aid -- it might seek.

Boeing previously suspended its dividend, canceled a planned deal with Brazilian plane maker Embraer SA that would have cost $4.2 billion and drew down a $13.8 billion loan.

Boeing shares, which have fallen 60% so far this year, rose 3% in premarket trade.

Write to Doug Cameron at doug.cameron@wsj.com and Andrew Tangel at Andrew.Tangel@wsj.com

(END) Dow Jones Newswires

April 29, 2020 08:28 ET (12:28 GMT)

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