BA Boeing Co

By Doug Cameron and Andrew Tangel 

Boeing Co. said Wednesday it was slashing plane production and cutting its workforce, as it reported a second consecutive quarterly loss and offered the first clear glimpse of the coronavirus pandemic's mounting financial strain.

The U.S. aerospace giant also offered a grim outlook, with travel bans and restrictions expected to halve global air travel in 2020, with an uncertain recovery spread out over several years that's left airlines unwilling or unable to take new planes.

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

Boeing, which burned through $4.7 billion in cash in the first quarter, has been considering applying for federal stimulus help, but didn't detail what type -- and how much taxpayer aid -- it might seek. It also has access to an undrawn $9.6 billion revolving credit facility.

The U.S. aerospace giant Wednesday said it would halve output of its 787 jetliner to seven a month by 2022 after an initial dip to 10 from 14, and resume 737 MAX output at a low initial rate this year, rising to 31 a month in 2021. It had planned to produce about twice as many MAX jets before regulators grounded the aircraft in March 2019 following two fatal crashes. It is also trimming 777 production.

Rival Airbus SE said earlier this month that it is cutting jetliner output by a third.

Boeing employed 161,000 staff as of Jan. 1, and plans to cut that by 10%, including voluntary layoffs and involuntary cuts as required.

Lower plane deliveries and sales of spares combined with the impact of temporary factory closures and the continuing impact of the 737 MAX crisis led to a quarterly 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 booked another $2.3 billion in charges during the quarter, with the production halt on the 737 MAX line raising additional expenses for the jet by a quarter to $5 billion. The KC-46A military tanker accumulated another $827 million in charges. Boeing's Covid-related production halts generated $137 million in additional costs, while fixing earlier 737 jets amounted to a $336 million charge. It didn't take a charge for cutting 787 output.

The company ended the quarter with $15.5 billion in cash.

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.

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

(END) Dow Jones Newswires

April 29, 2020 10:35 ET (14:35 GMT)

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