Loss of $2.4 billion in the last three months was reported by the United States based plane maker Boeing.
Analysts see this as the latest sign of troubles for the company because of the novel coronavirus pandemic which has hit the global aerospace industry particularly hard.
The “prolonged impact” of the pandemic has made it impending for the company to “further assess the size of our workforce,” said Boeing CEO Dave Calhoun in a note to employees. This is being seen as a precursor that the company would be shedding more jobs than the 16,000, equating to about 10 per cent of its global workforce, which it had previously announced.
There was however no panic among investors and analysts at Wall Street. The fact that Boeing had delivered only 10 jest last month was openly known to investors, even as the company had started to ramp up its production after its factory was shuttered by the pandemic.
The market expectations of the revenues and losses were spot on with those reported by Boeing.
Boeing stock was up slightly during pre-market trading.
Only 20 commercial airplanes last quarter had been delivered by it, Boeing had also revealed earlier in July. That was the lowest number of commercial airplanes deliveries by the company in a quarter since 1977.
Additionally, airlines cancelled orders for 60 Boeing aircraft last month. 150 orders were canceled in March, 108 in April, and 18 more in May.
Various airlines, the customer base of Boeing, are among the hardest hit by the novel coronavirus pandemic. Airlines have been forced to move thousands of jets into storage because of the plummeting of demand in air travel due to the travels restrictions imposed to prevent the spread of the pandemic. The airline industry itself is bracing for its worst every year in aviation history with no timeframe available for a recovery.
With billions in losses every month and hundreds of aircraft grounded, there is hardly any need for new crafts for airlines at the moment. This has hit aircraft makers like Boeing its European rival Airbus
“The reality is the pandemic’s impact on the aviation sector continues to be severe,” Calhoun, Boeing’s CEO, said in his letter to employees Wednesday. “While there have been some encouraging signs, we estimate it will take around three years to return to 2019 passenger levels.”
The order backlog for Boeing for its planes is still has more than 4,500 which is enough to keep the factories of the company running for at lets least two years. However the latest quarterly results showed that compared to only 59 new orders, Boeing currently has 843 canceled or uncertain orders in 2020.
Only one sale was counted by the company last month – a 767 freighter for FedEx. Cargo carriers have proved to be the sole bright spot in the airline industry because of the surge in e-commerce orders and demand for hauling medical equipment across the globe.
(Adapted from CNN.com)