Boeing reports big loss, signals more job cuts

NEW YORK: Boeing suffered a bigger-than-expected loss in the latest quarter, the company announced Wednesday, and signaled additional job cuts are likely as it contends with a protracted air travel downturn amid the coronavirus pandemic.

The aerospace giant, which previously suspended the dividend for shareholders and announced a 10 percent staff downsizing, also said it would phase out production of the iconic 747 jumbo jet and ratchet back production plans on other commercial aircraft due to the weak outlook.

Those moves are expected to lead to further job cuts.

"Regretfully, the prolonged impact of Covid-19 causing further reductions in our production rates and lower demand for commercial services means we'll have to further assess the size of our workforce," Chief Executive Dave Calhoun said in a message to employees.

"This is difficult news, and I know it adds uncertainty during an already challenging time. We will try to limit the impact on our people as much as possible going forward."

The results underscored anew the battered state of commercial aviation following lockdowns and travel restrictions imposed to limit the spread of the coronavirus. It comes on the heels of deep losses by leading US carriers that have announced belt-tightening plans of their own that will remove tens of thousands of jobs.

Airlines have canceled orders, suspended deliveries and deferred maintainance. Boeing delivered just 20 planes during the quarter, down from 90 in the year-ago period. Calhoun, in an interview with CNBC, said the latest surge in US coronavirus cases made the near-term travel outlook "more difficult" because airlines that had added flights amid a brief uptick in interest are now cutting back. But there also was "more optimism about a vaccine" for Covid-19 sometime in 2021, which would support an industry recovery, he said.

The company reported a $2.4 billion loss in the quarter ending June 30 as revenues plunged 25 percent to $11.8 billion.

The hit from coronavirus has prolonged and worsened Boeing's slump due to the crisis surrounding the 737 MAX, which was grounded globally in March 2019 following two deadly crashes.