News

At Boeing and Airbus, Finished Airplanes Pile Up

Details

Published: Monday, 10 August 2020 11:09

Airlines are putting off jet deliveries amid coronavirus, depriving manufacturers and their suppliers of cash

Boeing Co. BA -4.20% and Airbus SE EADSY 1.03% are making planes that airlines aren’t collecting, straining their finances as the coronavirus pandemic wreaks havoc on travel and the aerospace industry.

Airlines in many cases say they don’t want the aircraft for now, because they are unable to fill them profitably during a historic plunge in demand for flying. Travel restrictions are also hindering employees of some airlines from getting to the U.S. and Europe to pick up planes from factories.

The result: finished airplanes with nowhere to fly, and less cash for Boeing, Airbus and their suppliers as they slash production and payrolls. Customers generally pay more than half the purchase price when they receive aircraft. Boeing delivered 20 aircraft in the second quarter, down from 90 in that period last year. It was the lowest quarterly total since 1963, the early part of the jet age, according to an analysis of Boeing delivery data.

Excerpt from WSJ
Read the full article

What Travel Will Look Like After Coronavirus

Details

Published: Monday, 03 August 2020 15:02

Eight airline and hotel industry veterans make their predictions about what will change about safety and pricing and whether business travelers will ever return to the road

When will we be traveling again in large numbers? And what will travel be like in the future?

The first question depends on a medical solution to the coronavirus pandemic. The second is best answered with experience.

I asked eight travel pioneers for predictions on what the future of travel will be—current and former chairmen and chief executives of travel companies and a former secretary of transportation. All have experience from past crises and recoveries.

Most foresee a lasting decline in business travel, but think leisure travel will bounce back robustly. That means airlines and hotels will have to change their business plans, being unable to rely as much on rich revenue from corporate travelers. Expect higher ticket prices and room rates for vacationers to cover the costs with fewer high-dollar customers to subsidize bargain-seekers.

Excerpt from WSJ
Read the full article

GE Hit by Steep Decline in Jet-Engine Business

Details

Published: Wednesday, 29 July 2020 15:02

Conglomerate posts roughly $2 billion quarterly loss, but executives predict profits and cash will improve in second half of year

General Electric Co. GE -4.35% posted a roughly $2 billion quarterly loss as revenue tumbled 24%, hurt by a steep decline in a jet-engine business that has been hobbled by the coronavirus pandemic.

The aviation business, once a profit engine for GE, swung to a loss in the June quarter as both revenue and orders plunged. The unit produces engines for Boeing Co. BA -3.72% and Airbus SE planes but has had to cut production and jobs as airlines delay orders. On Wednesday, Boeing said it would cut further production of commercial jets.

GE reported it burned through less cash in the June quarter than it had previously warned. The company reported adjusted negative cash flow from industrial operations of $2.1 billion, compared with its projection of negative $3.5 billion to $4.5 billion in May. Analysts were expecting negative cash flow of $3.29 billion, according to FactSet.

Excerpt from WSJ
Read the full article

Boeing Details Plans for Mass Job Cuts

Details

Published: Sunday, 14 June 2020 17:36

Aerospace company starts forced layoffs as it reduces jetliner production

Boeing Co. BA 3.31% intends to shed more than 13,000 employees, the plane maker said Wednesday, including the first round of compulsory cuts as part of previously announced plans triggered by the coronavirus-driven collapse in global air travel.

The initial tranche of cuts is far larger than indicated on Tuesday by union officials. The aerospace company said the layoff notices delivered this week will be the largest part of plans announced last month to shed about 10% of its 160,000-strong global workforce this year as it reduces jetliner production in response to airlines’ inability and unwillingness to take new aircraft after huge declines in passenger traffic.

Boeing announced roughly 6,770 involuntary layoffs among U.S. employees, while a further 5,520 had been approved for voluntary severance packages and will leave over the next few weeks.

The company said it had completed its voluntary-layoff program after offering staff buyouts last month, with several thousand more jobs set to go under compulsory cuts over the next several months. They mark the first major reductions by the company since 2017, when it laid off roughly 1,500 workers as part of a wider cost-cutting drive.

Excerpt from WSJ
Read the full article