Boeing’s headquarters. Photo: Boeing

Boeing‘s First Quarter (Q1) results released Wednesday showed the effect of the COVID-19 pandemic hitting the aerospace industry, as the company is still reeling from the financial effects of the grounding of the 737 MAX jet due to safety issues, and working to return the jet to service.

The company’s revenues totaled $16.9 billion, a 26% decrease from the same Q1 2019. Boeing reported a net loss of $641 million. GAAP loss per share was $1.11. This report came after Boeing had a rough Q4 of 2019, posting its first company-wide annual loss in 22 years. 

Boeing’s Defense, Space & Security segment did not offer any relief, as revenues in Q1 shrunk 8% from the same time period in 2019, to $6 billion. The company attributed the decrease to a pre-tax charge on the KC-46A Tanker. In addition, there were productivity inefficiencies and COVID-19 related factory disruption on the project for the U.S. Air Force. Other programs in the segment were also impacted by COVID-19. 

In a message to employees, CEO David Calhoun said that with the pandemic, U.S. passenger volumes are down 95% compared to last year, it is impacting demand for new commercial airplanes, with airlines delaying purchases for new jets, slowing delivery schedules and deferring elective maintenance. Calhoun said the company is looking to lower its number of employees by roughly 10% through voluntary layoffs, natural turnover, and involuntary layoffs as necessary.

“The COVID-19 pandemic is affecting every aspect of our business, including airline customer demand, production continuity and supply chain stability,” Calhoun said. “Our primary focus is the health and safety of our people and communities while we take tough but necessary action to navigate this unprecedented health crisis and adapt for a changed marketplace.”

Calhoun also said that the stability of Boeing’s defense and space services will help limit the depth of the cuts, and emphasized that the pandemic crisis will come to an end. 

“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,” the CEO said.