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Deeper job cuts at Boeing as pandemic throttles air travel

The Associated Press

Boeing said Wednesday that it will cut 7,000 more jobs as it continues to bleed money during a pandemic that has smothered demand for new airline planes.

The company said that when retirements and other employee departures are included, its workforce will shrink to about 130,000 by the end of next year, or 30,000 fewer people than it had at the start of 2020. Just three months ago, the company figured 19,000 workers would leave.

Boeing Co. outlined the job cuts on the same day it reported a $449 million loss for the third quarter, a swing from the $1.17 billion it earned in the same period last year. The loss was not as bad as feared, however.

Revenue tumbled 29% to $14.14 billion.

Boeing has been whipsawed by falling revenue since its 737 Max was grounded in March 2019 after two deadly crashes, and then a coronavirus pandemic that caused air travel to plunge and left airlines with more planes than they need.

It has been a bruising stretch for one of America’s preeminent manufacturers. Thursday marks the second anniversary of the crash of a Lion Air 737 Max off the coast of Indonesia. Less than five months later, another Max crashed in Ethiopia. In all, 346 people died.

The virus has intensified Boeing’s financial troubles.

Air traffic in the U.S. has only recovered to about one-third of pre-pandemic levels, European traffic is similarly depressed, although the picture looks brighter in Asia.

Most experts think it will take airlines three years or longer to make a full recovery. With customers in no mood to buy expensive new planes, Boeing expects to keep burning cash. Chief Financial Officer Greg Smith said the company won’t generate cash until 2022.

The Max was Boeing’s best-selling plane, but now the company has 450 in storage that it can’t deliver. Boeing expects to ship about half of those to customers by the end of 2021, and it may have to find new buyers and reconfigure seating or other features for some, Smith said. The company also has an inventory of about 50 unsold 787s or Dreamliners.

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