Boeing Co., the largest aviation manufacturer in the United States, announced October 28 that it made $14.1 billion in the third quarter of 2020, leading to a net loss of $401 million from operations during the quarter and an operating margin of -2.8%.
At the same time, the aviation manufacturer said it would cut its workforce even further than previously announced during the height of the pandemic and stick to reduced production schedules announced in July.
“The global pandemic continued to add pressure to our business this quarter, and we’re aligning to this new reality by closely managing our liquidity and transforming our enterprise to be sharper, more resilient and more sustainable for the long term,” said CEO Dave Calhoun in a statement.
The fourth quarter now marks Boeing’s fourth negative quarter in a row as the COVID-19 outbreak killed demand for air travel during the same summer Boeing had planned to reintroduce the troubled 737 MAX to the skies. In total, Boeing has lost $4.7 billion dollars over the last nine months of 2020.
Deliveries of Boeing jets have fallen sharply as airlines without fliers tighten their belts. The airline manufacturer delivered only 28 new aircraft in July through September 2020 during the usually-busy summer season, less than half of the 62 deliveries it accomplished in 2019.
Boeing delivered 380 planes to commercial consumers in 2019, itself already a dramatic 53% loss compared to 2018, when it delivered 806 new non-defense planes: for the current year to date, it has delivered only 98.
In a statement accompanying the earnings announcement, Calhoun announced the plane manufacturer would continue laying off workers through 2021 in order to adjust to the new “market realities.” After two rounds of voluntary and involuntary layoffs earlier in the year, Boeing now says its aiming for a workforce of about 130,000 people by the end of 2021—which will require the company to eliminate 30,000 positions, 11,000 more than previously mentioned. 7,000 jobs will be eliminated by voluntary and involuntary layoffs, and the rest will be lost to attrition.
In a call with analysts, Calhoun discussed Boeing’s rivalry with European manufacturer Airbus, and said Boeing had lost crucial market share of the single-aisle jet market to them. Calhoun also maintained his previously-mentioned prediction that airline traffic would return to pre-COVID levels no sooner than three years from now and that airline traffic would be at about 30% 2019 levels by the end of 2020.
The company signaled that the first of its two crises might be nearing its end though: According to Boeing, the 737 Max, which was grounded in 2018 after two fatal crashes, has completed more than 1,400 test and check flights. In January, Calhoun said he hoped the 737 Max could return to the skies in time for the busy summer travel season: the company now hopes to resume deliveries of the plane before the end of the year.
