BA Boeing Co

By Doug Cameron 

Boeing Co. said it is reviewing jet production levels and plans to shed another 7,000 jobs by the end of next year in response to the mounting toll on the global airline industry from a fresh global surge in coronavirus cases.

The plans came as the U.S. aerospace giant on Wednesday reported a third-quarter loss of $466 million and said it is focused on preserving cash ahead of the expected return to service of the 737 MAX as soon as next month, ending a protracted world-wide grounding after two crashes took 346 lives.

The company expects to end next year with around 130,000 employees, having started 2020 with a workforce of 160,000, with the cuts including some layoffs.

Boeing's sales fell 29% in the latest quarter from a year ago and the company burned through $4.8 billion in cash, further evidence of the mounting financial cost from the MAX crisis and fallout from the coronavirus pandemic.

The per share loss of 79 cents in the quarter compared with a $2.05 profit a year earlier. Boeing shares rose 1% in premarket trading.

Boeing maintained its existing guidance to gradually increase MAX production through next year and reduce output of the 787 Dreamliner when it moves all assembly to North Carolina. However, Boeing officials said it could reduce output further if airlines are unable to take delivery because of a lack of demand or financing. Wide-body planes like the 787 are under particular scrutiny because of the collapse in long-haul international flying.

Global airline traffic is expected to halve this year and remain severely depressed in 2021 and beyond, ending a decadelong boom in jet sales that has led airlines to postpone or cancel their orders.

The existing production cuts and pandemic-driven restrictions are forecast to limit jetliner deliveries to airlines and leasing companies to just 170 this year compared with about 500 at rival Airbus SE, according to analysts. Boeing handed over just 28 planes to customers in the September quarter compared with 62 a year earlier, and has become more reliant on its defense business to drive revenue and profit.

Boeing's commercial jetliner arm reported a loss of $1.4 billion in the quarter as sales fell 56%.

The defense business produced a profit of $628 million, down 2% from a year ago, but executives said they were watching a potential slowdown.

Write to Doug Cameron at doug.cameron@wsj.com

(END) Dow Jones Newswires

October 28, 2020 08:28 ET (12:28 GMT)

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