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Boeing cuts commercial jet production rates
Wednesday, 29 July 2020
Boeing says it must assess staff levels, and consider closing one Dreamliner production line, so severe is the impact of COVID-19 on world travel demand. Considerably fewer aircraft will leave the factory in coming years.

Boeing has revealed plans to reduce production rates for the 737, 777 and 787, and confirmed the expected cessation of manufacture of the 747 in 2022.

In a message to employees Boeing President and CEO Dave Calhoun addressed what he described as aerospace market realities: "These past few months have been unlike anything we’ve seen. The pandemic’s effect on our communities and industry is ongoing. And the challenges we face as a company are still unfolding.

"The reality is the pandemic’s impact on the aviation sector continues to be severe. Though some fliers are returning slowly to the air, their numbers remain far lower than 2019, with airline revenues likewise reduced. This pressure on our commercial customers means they are delaying jet purchases, slowing deliveries, deferring elective maintenance, retiring older aircraft and reducing spend - all of which affects our business and, ultimately, our bottom line. While there have been some encouraging signs, we estimate it will take around three years to return to 2019 passenger levels."

Production of the 737 production will ramp up slower than previously planned, with a gradual increase to 31 per month by the beginning of 2022. The combined 777/777X production rate will be reduced to two per month in 2021, which is one unit lower per month than announced last quarter.

Dreamliner 787 production will fall to six per month in 2021. This is an adjustment down from the reduction announced last quarter to 10 per month currently and seven per month by 2022. Calhoun says that this lower rate profile will mean that the company also needs to evaluate the most efficient way to produce the 787, including studying the feasibility of consolidating production in one location.

The 767 and 747 build rates remain unchanged, but Boeing will complete production of the 747 in 2022. A previously announced net 10% workforce reduction in 2020 will be reassessed.

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