MRO Management

Boeing’s commercial division strongly impacted by Covid-19 and 737 MAX grounding in third quarter

Boeing 737 MAX
photo_camera Boeing 737 MAX 7 First Flight Air To Air

Boeing Commercial Airplanes has reported third quarter revenues of US$3.6 billion, a year-on-year decline of 56.4 per cent.

Deliveries dropped from 62 in the same period in 2019 to 28 this quarter.

Boeing said the Covid-19 pandemic had taken a heavy toll, while 787 quality issues and associated rework also impacted revenue.

Boeing 3Q revenues
Boeing Commercial Airplanes third quarter revenues and operating margins. Click to enlarge.

During the quarter, the final 777X flight test aircraft was added to the test programme while the GE9X engine received FAA certification.

In October, the company announced it would consolidate 787 production in South Carolina in mid-2021. The decision did not have a significant financial impact on the programme in the third quarter.

Boeing’s commercial delivery backlog includes more than 4,300 aircraft which are valued at US$313 billion.

The Boeing Company reported overall third quarter revenue of US$14.1 billion, a 29 per cent year-on-year drop.

Boeing 3Q results
Boeing Commercial Airplanes third quarter results. Click to enlarge.

“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 Boeing’s president and chief executive officer Dave Calhoun.

“Our diverse portfolio, including our government services, defence and space programmes, continues to provide some stability for us as we adapt and rebuild for the other side of the pandemic.

“We remain focused on the health and safety of our employees and their communities. I’m proud of the dedication and commitment our teams have demonstrated as they continued to deliver for our customers in this challenging environment.

“Despite the near-term headwinds, we remain confident in our long-term future and are focused on sustaining critical investments in our business and the meaningful actions we are taking to strengthen our safety culture, improve transparency and rebuild trust.”

Boeing said “steady” progress was made toward the safe return to service of the 737 MAX during the quarter. This included rigorous certification and validation flights conducted by the US Federal Aviation Administration, Transport Canada and the European Union Aviation Safety Agency. The Joint Operational Evaluation Board, featuring civil aviation authorities from the US, Canada, Brazil, and the European Union, also conducted its evaluations of updated crew training.

Boeing also said it made steps toward a continued transformation of its business across five areas. These include its infrastructure footprint, overhead and organisational structure, portfolio and investment mix, supply chain health and operational excellence.

The company expects to continue lowering overall staffing levels through natural attrition as well as voluntary and involuntary workforce reductions.

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