Boeing Is Scrambling To Cut Costs Because of Diminished Demands For New Aircraft

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One of the most significant aircraft manufacturers in the world, Boeing is looking to cut down on its total costs for the time being. The CEO of Boeing, Dave Calhoun expressed to the company’s shareholders that the global airline operations are at an all-time low at the moment and it will take the aviation industry at least three years to come back to its regular demand as that it saw on 2019. Boeing was already facing a problem with the grounding on its 737 Max. Shareholders seemed to be supportive of the words of Dave Calhoun and approved of the decisions that the board of the manufacturing giant feels are right.

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Image Credits - fool.com

Air Travel Demand is Dropping As The Day Progresses

It is not surprising that people are hesitant about travelling during the global pandemic. At the moment, the air travel demand in the USA is 5% of what it was last year. In addition to this, most of the governments have shut down commercial airline operations the country, be it domestic or international. Airbus has also cut down its production by a third to save costs. One of the main reasons behind cutting down on the production of new aircraft by Boeing and Airbus is that airlines are not looking to increase their fleet with new planes. Airlines are also not generating the kind of cash flow they would like.

Airlines Are Cancelling Their Orders From the Manufacturer

Boeing is facing a lot of cancellations on the aircraft orders from all over the world. At such a hard time, Boeing is offering its employees the option of a buyout. Employees can also opt for voluntary leaves if they wish to. The company is trying to reduce costs by seeking to pay fewer people. Boeing is not going to be giving dividends as well. Boeing also stepped out of its deal with Embraer. The company is expected to reduce the production of its wide-body aircraft such as the 787 Dreamliner.

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Tanay hails from Bilaspur, Chattisgarh and is a sports and fitness enthusiast. Reading and writing is something which comes to him out of love for the web of magic that words can create.

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