Headquartered in Chicago, Illinois, The Boeing Company today reported a loss of US$641 million in the first quarter of 2020. The company's revenues are down to US$16.9 billion, a 26% decrease from a year earlier, and has reported a cash burn of US$4.3 billion.Total company backlog at the quarter's end stood at US$439 billion, and included over 5,000 commercial aircraft. To explain these results, Boeing cited significant impact to its business occasioned by the COVID-19 pandemic and the global 737 MAX grounding.
Last year, Boeing faced the worldwide grounding of its then-successful 737 MAX aircraft following two fatal crashes, the first in late 2018 (Lion Air Flight 610) and the second in early 2019 (Ethiopian Airlines Flight 302). Where COVID-19 is concerned, Boeing President David Calhoun said "The COVID-19 pandemic is affecting every aspect of our business, including airline customer demand, production continuity and supply chain stability."
Boeing is seeing significant impact on demand for new commercial airplanes and services due to the pandemic and the financial report states how it is taking action to align itself for the market reality. This consists of reducing commercial airplane production rates, leadership and organisational restructuring to streamline roles and responsibilities, and plans to reduce overall staffing levels with a voluntary layoff program.
Alongside many U.S airlines, Boeing is looking at obtaining finance and managing liquidity. It has drawn down on a US$13 billion loan and is seeking US$60 billion in government aid. The company has reduced operating costs, suspended dividends, reduced research and development expenditures and eliminated CEO and Chairman pay for the year. The company states that it is actively exploring all available options and believes it will be able to obtain sufficient liquidity to fund its operations.
A positive statement was given by the CEO Calhoun, who stated that "While COVID-19 is adding unprecedented pressure to our business, we remain confident in our long term future." He says the company continues to support defence customers in critical national security missions and is progressing towards the safe return to service of the 737 MAX. He is confident the company will "emerge from the crisis and thrive again as a leader of the industry."