Covid-19 spells end of Boeing 747

Boeing will stop making the Boeing 747 jumbo jet in 2022 and slow the number of 737 Max aircraft being built in the face of the “severe” impact of Covid-19 on the aviation sector.

The US manufacturer suffered a $2.4 billion net loss in the second quarter of the year.

The combined 777/777X production rate is being cut to two a month in 2021.

Production of the 787 Dreamliner will be adjusted down to six a month next year and seven a month by 2022.

President and chief executive Dave Calhoun said: “With this lower rate profile, we will also need to evaluate the most efficient way to produce the 787, including studying the feasibility of consolidating production in one location.

“While our 767 and 747 rates remain unchanged, in light of the current market dynamics and outlook, we’ll complete production of the iconic 747 in 2022.

“Our customer commitment does not end at delivery, and we’ll continue to support 747 operations and sustainment well into the future.”

Boeing said the slowdown may mean deeper job cuts on top of around 16,000 layoffs – around 10% of its workforce – already planned.

“Our government services, defence and space programs provide some critical stability for us in the near-term as we take tough but necessary steps to adapt for new market realities,” Calhoun said.

“We are taking the right action to ensure we’re well positioned for the future.”

He told staff: “The reality is the pandemic’s impact on the aviation sector continues to be severe.

“Though some fliers are returning slowly to the air, their numbers remain far lower than 2019, with airline revenues likewise reduced.

“This pressure on our commercial customers means they are delaying jet purchases, slowing deliveries, deferring elective maintenance, retiring older aircraft and reducing spend – all of which affects our business and, ultimately, our bottom line.

“While there have been some encouraging signs, we estimate it will take around three years to return to 2019 passenger levels.

“That’s why we’ve been taking decisive actions. To bolster our near-term liquidity, we suspended our dividend, terminated our share repurchasing program, reduced discretionary spending and overhead costs, and issued $25 billion in new debt.

“While these steps help us navigate the pandemic, they don’t change the fact that the commercial marketplace is different, and we must change with it.

“To align to a smaller market, we lowered commercial production rates and took tough workforce actions throughout the quarter.

“Unfortunately, it’s become clear that we need to make further adjustments based on the prolonged impact of Covid-19.”

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