Boeing to cut 2020 aircraft output rates on weak demand from pandemic: company

Pittsburgh — Boeing will reduce its 2020 commercial airplane production rates as major airlines delay new jet purchases and delivery schedules in response to reduced passenger traffic caused by the coronavirus pandemic, the company said Wednesday.

Most notably, Boeing said it will cut manufacturing rates for its 787 jet models to 10 units/month from 14 units/month in 2020, with a further decline to 7 units/month by 2022, according to a statement. The 787 models represented about 58% of Boeing's total production in the first quarter.

Weak demand caused by the pandemic has also slowed the planned production rate ramp-up of the 737 model program, Boeing said, adding that manufacturing of the 737 MAX aircraft will continue at "low rates" in 2020 until market conditions become clearer.

Boeing said it planned to increase production of the 737 Max to 31 units/month during 2021, with further gradual increases to correspond with market demand as necessary.

The aircraft manufacturer's total commercial airplane deliveries in Q1 plunged 66% year on year to 50 units, with revenue in the business segment also falling 48% in the period to $6.2 billion. Boeing said the drop in revenue was attributable to both pandemic-related market disruptions and the grounding of the 737 MAX model.

"We are progressing toward the safe return to service of the 737 MAX, and we are driving safety, quality and operational excellence into all that we do every day," Boeing CEO David Calhoun said. "Air travel has always been resilient, our portfolio of products and technology is well positioned, and we are confident we will emerge from the crisis and thrive again as a leader of our industry."