Boeing losses reach $2.4 billion in Q2, 787 line in Everett in jeopardy

The pandemic continues to play havoc with Boeing’s finances as the company also tries to regain the public’s trust after two deadly plane crashes.

Boeing laying off over 6,700 workers, cites ‘devastating impact’ of pandemic

Second quarter earnings came out today, and they aren’t pretty.

“Our industry and our company are weathering challenges like none we have experienced in our lifetimes, and many of those challenges are still unfolding,” said Boeing CEO David Calhoun.

Boeing lost $2.4 billion in the second quarter, marking the third straight losing quarter for the company. Revenues for the quarter came in 25% below Q2 of 2019 at just under $12 billion. Q2 of 2019 was just after the second of two deadly 737 MAX crashes to give you some perspective on just how low the revenues have sunk.

The delivery numbers reflect the lack of confidence in the MAX and the reality of the global pandemic. No one is buying new airplanes or even taking significant deliveries because global passenger traffic has virtually disappeared. Boeing only delivered 20 commercial airplanes in the second quarter, and has only delivered 90 for the year. That’s off over 70% from last year.

The company is still reporting a backlog of orders for 4,500 planes.

“We continue to believe the fundamentals that have driven air travel for the last five decades and doubled air traffic over the last two decades remain intact,” Calhoun said. “We believe this industry will, in fact, recover, but we currently estimate it will take around three years for travel to return to 2019 levels.”

Dismal 2020 continues for Boeing as it delivers just four planes in May

The first delivery of the 777X has been pushed back to 2022. The combined 777 line will be reduced to just two planes a month next year.

Production on the 787 will be reduced to just six a month, which could put the production line in Everett in jeopardy.  Boeing is considering only keeping one 787 production line, either Everett or North Charleston, South Carolina.

“We will prudently evaluate the most efficient way to produce the 787 to include the studying the feasibility of consolidating our 787 production into one location,” Calhoun said.

Most analysts expect that North Charleston would win this battle since it produces the largest member of the family, the 787-10. Boeing would also save money by no longer flying fuselage pieces to Everett.

Boeing also confirmed that production of the iconic 747 will end in 2022.

The MAX will begin a gradual production ramp up to 31 airplanes a month in 2022. Calhoun expects to start delivering the MAX in the fourth quarter of this year.

On the defense side, the company about broke even over Q2 last year, posting revenues of $6.6 billion.

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