The US aeronautical manufacturer Boeing lost 628 million dollars (about 580 million euros) in the first quarter of 2020, compared to the 2,149 million (1,980 million euros) it earned in the same period last year, due to the COVID-19 pandemic and the stoppage of 737 MAX aircraft.
CThe firm announced on Wednesday that its turnover between January and March fell 26% year-on-year to 16,908 million (14,590 million euros), adding that it has a negative operating cash flow of 4,300 million (3,965 million euros). , but noted that it is “actively exploring all available options” to obtain liquidity and finance its operations.
“The COVID-19 pandemic is affecting all aspects of our business, including demand from customer airlines, continuity of production and stability of the supply chain,” explained Boeing CEO David Calhoun, who said he is focused on the “health and safety” of his employees and the community.
Although the pandemic is adding “unprecedented pressure,” the firm says it is confident in its “long-term future” and is “making progress on a safe return to service for the 737 MAX,” Calhoun added.
Boeing’s main business, commercial aviation, entered 6,205 million dollars (48% less), and its operating margin has plummeted to -33% due to the lower volume of deliveries and the accumulation of costs, including the 797 million of the production stoppage of the 737 MAX and 137 million of the interruption of operations that the pandemic has imposed on its plants.
Boeing indicated that it will resume production of the 737 MAX at a low rate “in 2020”, without specifying dates and as the environment improves, and will increase it to 31 units per month in 2021, and reported that the costs of maintaining the outside its star model on the ground they reach almost 5,000 million dollars (about 4,600 million euros).
The Chicago-based company highlighted the reduction in passenger traffic that airlines are suffering due to the coronavirus, which has a “significant impact on the demand for new commercial aircraft and services” as they are delaying their purchases, slowing deliveries and postponing maintenance of appliances.
The corporate has taken measures to face the “new reality of the market”, such as reducing its production rate, restructuring its command team and offering incentive exits to its staff, in addition to requesting a long-term loan, cutting costs and expenses, suspend share buybacks and dividends, and “eliminate the salary” of its chief executive officer and president.