Boeing, as well as Airbus, are the most famous airplane manufacturers in the world. However, even for such giant companies, the coronavirus pandemic created a lot of problems. Both of them are struggling to cope with the ongoing crisis as travel demand all but disappeared over the last several months.
Moreover, the coronavirus crisis is a fresh problem for Boeing as the company was trying to cope with the grounding of its best-selling plane.
In the first quarter, revenue missed expectations. Boeing’s revenue was $16.91 billion while Wall Street expected that revenue would reach $17.30 billion.
Also, in comparison with the same period in 2019, revenue decreased by 26% to $16.91 billion.
Aviation industry and Boeing
Air travel in the U.S. fell by 95% compared with the same period in 2019. Moreover, Boeing’s CEO Dave Calhoun, said it would take two to three years for travel demand to return to 2019 levels. Also, due to the current situation, the company decided to reduce its workforce by about 10% to reduce the costs.
As a reminder, Boeing was the largest airplane manufacturer before it lost this status and this happened even before the coronavirus pandemic. The company’s best-selling plane narrow-body Boeing 737 Max remains on the ground for more than a year. Moreover, nobody knows for sure when this model will be able to transport passengers once again.
Boeing started to lose money even before the pandemic, but coronavirus created even bigger obstacles. As a result, Boeing posted a $641 million loss in the first quarter of 2020.
Moreover, in the first quarter, the company burned through $4.3 billion in cash. The company had to deal with rising cancellations and a dearth of orders.
As stated above, Boeing plans to reduce its workforce by about 10%. Also, the company decided to produce fewer aircrafts each month as the world aviation market is struggling to deal with the existential crisis.