Boeing HQ
Today’s key news centers about the continuing impacts of the IAM strike and the resumption of production as the company focuses on improving efficiency and cash flow. Aircraft production will take weeks to restart, impacting Boeing’s cash flow, with continuing losses for the fourth quarter. The strike has already been costly, with one analysis totaling $9.66 billion in losses. That is a massive total, and underscores why the company needed to obtain $21 billion in additional equity.
The company is continuing its restructuring plan, and layoff notices began to be issued today. The company is looking to reduce workforce by 10%, or about 17,000 people. With the IAM exempt from layoffs, the reduction in force will center on white collar employees throughout the company. Employees are naturally on edge, and wondering on whom the axe will fall.
In good news, Vietnam Air looks to be ready to place an order for 50 737MAX aircraft in early 2025. The airline had previously negotiated a deal with Boeing that was never executed, and the carrier plans to add 170 aircraft to the fleet over the next few years, as it undertakes a major expansion. Currently, the carrier operates Airbus narrow-bodies, and they may make a move to diversify its fleet. With the MAX having more near-term availability, assuming Boeing can ramp its production rate, this presents a viable alternative to Airbus, which is sold out into 2032.
The freighter market is a strong success story for Boeing that is likely to continue. The company took orders for seven 777F freighters last month, adding to the freighter backlog that is keeping the 777 line productive until the 777X is certified. The company also reiterated elements of its Commercial Market Outlook projecting a 67% growth in the freighter market by 2043. Boeing has a massive market share advantage in freighters, and driven by demand in Asia, the company foresees their advantage to continue, given lower freighter sales at Airbus. With freighter conversions also dominated by Boeing, this is a market with a nearly 90% Boeing market share.
Links to todays news follow:
- Boeing says plane production restart will take weeks – Inc Magazine
- Boeing strike losses estimated at $9.66 billion in losses – Pension Times
- Boeing starts issuing layoff notices as part of plan to cut 17,000 workers – Reuters via Yahoo
- Vietnam Air eyes order for 50 jets in 2025 with Boeing as top contender – BNN Bloomberg
- Seven Boeing 777Fs ordered last month – Air Cargo News
- Boeing forecasts 67% growth in global air cargo fleet by 2043, driven by Asia demand – Benzinga
- ShouldElon Musk buy Boeing – AirInsight
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