Commercial airline revenue is expected to drop by US$314 billion this year
Boeing President and CEO Dave Calhoun has issued a letter to Boeing employees that addresses the tough times facing the aerospace sector and the plans the aerospace giant has for the future.
Mr calhoun stated that the global coronavirus pandemic has changed the way we live and work, stating: "It is changing our industry. We are facing utterly unexpected challenges."
He added that the "...pandemic is also delivering a body blow to our business — affecting airline customer demand, production continuity and supply chain stability.
"The demand for commercial airline travel has fallen off a cliff, with U.S. passenger volumes down more than 95% compared to last year.
"Globally, commercial airline revenue is expected to drop by US$314 billion this year."
As a result of the pandemic, airlines are delaying purchases for new jets, putting the brakes on delivery schedules and deferring elective maintenance.
The aviation industry will hence take years to return to the levels of traffic witnessed in 2019.
Mr Calhoun outlined the following steps for the tough times ahead:
Boeing expects to resume 737 MAX production at low rates in 2020, gradually increasing to 31 planes per month during 2021, with gradual increases to correspond to market demand.
A plan to reduce the 787 production rate to 10 per month in 2020 and to 7 per month by 2022, continuing to evaluate the rate after that.
A plan to reduce the combined 777 / 777X production rate to 3 per month in 2021 and take a measured approach to the 777X rate ramp.
The 767 and 747 production rates will remain unchanged.
Mr Calhoun also said: "Please know this: Our industry and our company will get through this.
"Air travel has always been resilient over the long term, and our portfolio of products, services and technology is well-positioned for the recovery that will come."