New York, October 29: The American Airline Industry continues to experience the heat of the coronavirus pandemic, which has left it incurring huge losses. Among several aircraft makers, Boeing announced nearly 7000 additional job cut. This was due to the company’s surging loss after its revenue was badly hit due to the pandemic situation. This, in turn, created travel restrictions in any form across all international borders.
Announcement from the Company
Earlier in 2020, the company already carried out a layoff process of 19,000 employees. On Wednesday, October 29, the aviation industry giant announced that it would downsize more by the end of 2021. This might amount to almost 1,30,000 combined together, including the latest 7000 job cuts announced.
Needless to say, the numbers are indeed shocking. However, Boeing did not reveal anything specific as to where or which particular segment the job cut will take place; and also, whether these job cuts would be the last phase of series of layoffs that Boeing had to carry out since the first half of the year.
Due to travel restrictions owing to the pandemic, the company’s profit took a hit and incurred 29% amounting to a loss of $574 million. Overall airlines halted new plane deliveries and cancelling orders. The impact was severe as that most of Boeing’s revenue comes from the aircraft sale during the time of delivery. In terms of the earnings call, CEO Dave Calhoun said that the global coronavirus pandemic had put tremendous pressure on the organization’s functioning leading to huge revenue loss, especially in this quarter.
Present Expectation from the Company
However, Calhoun also added that bouncing back will take time. It will not return to the 2019-levels so soon and might take a couple of years to scale up to the predicted numbers around 2019, before the pandemic. The aircraft maker has already borrowed more than$37 billion extra debt to tackle this slump. Despite the surging cash burn, Boeing had a cash repository worth $10.6 billion at its disposal.
The company on Wednesday announced, from now on it will use Boeing’s stocks to fund contribution towards employees’ 401(k) plans. This is a careful decision to save up to $1 billion in cash. How much does the aviation industry revive and how rapidly so, only time has the best answer. Till then we have to wait with bated breath for the deadly virus to wipe out from our lives.