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Boeing slashes jet output, eyes factory shake-up as COVID-19 hammers sales

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(Reuters) – Boeing Co (BA.N) slashed production of its biggest twin-engined jets, delayed its new 777X by up to a year and began sunsetting the iconic 747 as it posted a bigger-than-expected quarterly loss dominated by the COVID pandemic on Wednesday.

The cuts mark the industry’s latest effort to tackle a crisis that has decimated demand for air travel, with oversupplied wide-body models like the 787 Dreamliner and 777 plunging deeper into an existing downturn.

Boeing also remains exposed to tensions between the United States and China, which has shelved plans to buy big U.S. jets.

“Our industry and our company are weathering challenges like none we have ever experienced in our lifetimes,” Chief Executive Dave Calhoun told analysts.

Boeing said it would cut 787 output to six a month in 2021 – down from a previous goal of seven and the third such cut since a year ago when output touched a record 14 a month.

It also plans to cut combined output of the 777 mini-jumbo and its new 777X sister model to two a month in 2021 from a previous goal of three, while delaying the 777X entry to service by a year to 2022, confirming a Reuters report.

Boeing shares fell 3% partly on the lower production, though analysts said it had managed to contain its cash burn, a central concern for investors.

Boeing lost an adjusted $4.79 per share, against average estimates of a loss of $2.54, according to Refinitiv IBES data.

The commercial airplanes unit was hit by $468 million in severance expenses related to plans to cut 19,000 jobs of its roughly 160,000 workforce and Boeing warned deeper cuts were possible.

“We’ll have to further assess the size of our workforce,” Calhoun told employees.

The financial impact of the health crisis has compounded the safety grounding of Boeing’s narrow-body 737 MAX 16 months ago.

Calhoun told analysts MAX deliveries would resume in the fourth quarter, a fresh delay of several weeks that raises the prospect that its U.S. return to service could slip into 2021.

Boeing also slowed plans to lift battered MAX production, by pushing its target of 31 jets a month into 2022 from 2021.

“We still see a path to positive cash flow in 2021,” CFO Greg Smith added, noting it would take a year after MAX deliveries begin to clear a backlog of around 450 parked jets.

787 factory study

In a further shake-up, Calhoun said Boeing was looking at whether to consolidate 787 production in one location as it cuts output.

It splits production on the 787 Dreamliner between Everett, Washington, and North Charleston, South Carolina.

That raises questions over the future of the Everett hub because the largest 787-10 can only be built in South Carolina.

Smith said Boeing would be able to return to a rate of 10-11 787s monthly at some point.

Calhoun said it was too early to predict the outcome of the study, part of a wider industrial reassessment.

The wide-body production cuts reflect fears that it could take until 2023 for air traffic to return to normal levels. Long-range routes – served by bigger jets like Boeing 787 and Airbus (AIR.PA) A350 – have been hit harder than short hops.

Industry sources said Boeing’s production cuts would put pressure on Airbus to further cut its own wide-body production. Airbus declined comment ahead of earnings on Thursday.

Boeing also confirmed the last of its legendary 747 would roll out of the factory in 2022.

The easily spotted hump-topped jumbo had democratized global air travel in the 1970s and was a favorite of presidents and potentates, before it fell behind modern twin-jets.

The coronavirus pandemic has added to the pain.

Reporting and photo: Reuters

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Maldives celebrates arrival of 2024’s 1 millionth tourist

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Maldives on Thursday welcomed the one millionth tourist to visit this year.

The one millionth tourist is a Thai named Sutapa Amonwivat, who arrived from Singapore with her husband and two children. This is her second visit to Maldives.

Maldives Marketing and Public Relations Corporation (MMPRC) and the Ministry of Tourism gave a warm welcome to Sutapa at the Velana International Airport (VIA) Thursday afternoon. She was welcomed at the VIA by tourism minister Ibrahim Faisal, MMPRC Managing Director Ibrahim Shiury and senior officials of various relevant agencies.

After welcoming her with traditional offerings, she was presented with various gifts by the ministry, MMPRC, customs, immigration, Maldives Association of Travel Agents and Tour Operators (MATATO) and Trans Maldivian Airways (TMA).

Maldives reached one million tourists in June, three weeks earlier than last year. The number of tourists reached one million on July 16, 2023.

Maldives expects to reach 2 million tourists this year.

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New air route connects Chongqing to Maldives

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Chongqing Airlines on Monday began its inaugural flights to Maldives.

The Chongqing-Male route, scheduled three times a week, is expected to strengthen the bonds between China and the Maldives, opening up exciting new opportunities for tourism and cultural exchange.

The inaugural flight was welcomed upon its arrival at Velana International Airport (VIA) in Maldives, where local officials and tourism representatives expressed their enthusiasm for this new development.

“We warmly welcome our friends from China to our beautiful islands. This new connection strengthens our bonds and opens up new opportunities for tourism,” the tourism ministry said on X.

Maldives currently welcomes four airlines from China, including China Eastern, Beijing Capital Airlines, Xiamen Airlines.

In January, Maldives government urged tourism stakeholders in both Maldives and China to ramp up efforts to restore China’s position as the primary source market for Maldives tourism, a status held before the onset of Covid-19.

China, being the largest source market for Maldives tourism before the pandemic, saw a resumption of tourist arrivals from January 2023 after a three-year hiatus due to the pandemic. In 2023, the Maldives welcomed 187,118 Chinese tourists, marking a significant recovery in numbers. This year, the Maldives has welcomed the most number of tourists from China, with over 107,940 or 11.5 percent of total arrivals by June 12. 

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CROSSROADS Maldives Introduces Weixin Pay at resorts for seamless guest experience

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CROSSROADS Maldives has introduced WeChat Pay, widely known as Weixin Pay in China, across its world-class resorts, SAii Lagoon Maldives, Curio Collection by Hilton, and Hard Rock Hotel Maldives. This payment option is made available to enhance the convenience and overall experience for guests from China, making their stay in the Maldives more enjoyable and hassle-free.

Understanding the needs of the diverse guests, CROSSROADS Maldives has integrated WeChat Pay into operations, allowing guests from China to easily and securely conduct transactions using a payment method familiar to them. The introduction of WeChat Pay is a testament to CROSSROADS Maldives’ dedication to enhancing guest satisfaction by offering exceptional experiences at every turn. What is also expected through this initiative is that the guests could benefit from better foreign exchange rates, translating to better savings on their expenditures during their stay.

The option is available for guests in-house conveniently at both resorts as well as across the Marina at CROSSROADS Maldives where a wider variety of unparalleled dining and retail experiences are available for all guests. The day visitors from China will also therefore equally benefit from this new introduction at the Maldives’ premier multi-island integrated leisure destination.

SAii Lagoon Maldives, Curio Collection by Hilton, is a vibrant tropical escape that offers unique and locally inspired experiences. The resort features spacious rooms and villas, a variety of dining options, and an array of recreational activities designed to cater to the desires of modern travellers. Guests can escape to the island’s SAiisational natural beauty, enjoy water sports, and indulge in spa treatments, all while relishing the personalised service that defines Hilton’s Curio Collection.

Hard Rock Hotel Maldives brings the iconic Hard Rock spirit to the tranquil shores of the Maldives. This family-friendly resort offers a perfect blend of relaxation and entertainment, featuring music-inspired experiences, live performances, and the brand’s signature amenities. With luxurious accommodations, diverse dining options, and a plethora of activities for all ages, Hard Rock Hotel Maldives ensures an unforgettable holiday experience for every guest.

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