over 3 years ago • 2 mins
Boeing announced better-than-expected earnings on Wednesday, but the US aircraft maker’s going to some pretty extreme lengths to cut costs 💵
Boeing didn’t lose as much money in the third quarter as analysts had forecast, but the $466 million it did lose shows just how dire its situation is. What’s more, its customers – the world’s airlines – have ordered fewer than half the planes as they did in 2019 so far this year, and they only tend to pay in full when the goods are actually delivered. That means Boeing needs to cut costs – and fast.
Unfortunately, it’s doing that by slashing even more jobs than the 16,000 announced in May 🔪 A not-so-grand total of 7,000 more people are going to be laid off, in view of ending up with 30,000 fewer staff by the end of 2021.
This pandemic would’ve always been a problem for Boeing, but it arrived at a particularly bad time: the manufacturer was already facing a crisis after two separate crashes saw its 737 Max airplanes grounded indefinitely 🛬 So it might’ve been relieved to finally get the all-clear from the European regulator last week, with the same expected to happen in America. And not a moment too soon: Boeing received two orders for the plane in August.
Before the coronavirus outbreak, business travel represented around a third of all US flights and half of all US airlines’ revenue. But while air travel is picking up again, that owes more to holiday-makers than it does execs with a perfectly serviceable Zoom account 🏝 That means airlines – and by extension Boeing – are losing out on a major source of income, and they’d better get used to it: some airlines think it’ll take up to 10 years for business travel to get back to normal.
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