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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

Events

Maldives Association of Tourism Industry (MATI) holds its 34th Annual General Meeting

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The Maldives Association of Tourism Industry (MATI) held its 34th Annual General Meeting at Kurumba Maldives today, with a total of 100 members in attendance. 

The day’s events began with a welcome address from the Chairman of MATI, Mr. Mohamed Umar, who also presided over the session. The agenda included an address from the Secretary General, Mr. Ahmed Nazeer, the review and approval of the minutes of the 33rd AGM, the review and adoption of the Annual Report and Financial Reports for 2023, the approval of the 2024 budget, the appointment of auditors for 2024, the welcoming of new members and election of executive board members to the two vacant positions (by-election).

In the member discussion session, the following topics were covered: the Government’s aim to reach net-zero emissions by 2023 and renewable energy generation in the Tourism Industry, new terminal of Velana International Airport and developments, employment challenges, the Industrial Relations Act and trade unions, environmental conservation and the significance of creating and executing efficient management plans for protected areas like the South Ari Marine Protected Area (SAMPA).

Following the official proceedings, the Minister of Tourism Hon. Ibrahim Faisal and the Minister of Economic Development and Trade Hon. Mohamed Saeed joined the forum. The Ministers provided remarks and engaged in a Member Q&A session. This session provided members with the chance to directly engage with the Ministers and delve into crucial industry topics. The queries focused on the Economic Outlook, forthcoming development plans and  immediate challenges and issues affecting the Tourism Industry.

A video presentation was also showcased that delved into the extensive work undertaken by MATI in 2023. The video also touched upon the Tourism Industry’s performance over the past 5 years, as well as the current and projected human resource capacity of the sector.

In his closing remarks, the Secretary General highlighted the importance of collaborative efforts in addressing industry challenges and called for greater unison amongst industry stakeholders, ending with an acknowledgement of the promising start to the year in terms of arrivals.

Executive Board Members elected to the 2 vacant positions (by-election):

  1. Ibrahim Shareef, CEO and Managing Director of Maldives Airports Company Limited
  2. Renato De Olivera, General Manager of The Ritz-Carlton Maldives, Fari Islands and representative of Marriott International
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Business

Unlocking power of travel storytelling at Travel Creators Exchange 2024

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Join us for the Travel Creators Exchange 2024, taking place on February 1, 2024, at the Hotel Jen in Male’, Maldives.

This dynamic event provides a platform for networking and collaboration among Maldives-based travel creators, fostering connections, idea-sharing, and the establishment of lasting partnerships to expand opportunities and monetise content.

Our lineup of distinguished speakers includes:

  • Zihuny Rasheed, Deputy Managing Director of MMPRC, will present on “Power of Digital Storytelling: Collaborative Strategies for Destination Promotion.” MMPRC actively markets the Maldives globally, utilising a comprehensive approach that includes travel trade shows, roadshows, digital marketing, and more.
  • Amjad Thaufeeg, Commercial Director of Kuda Villingili Maldives Resort, brings over 23 years of hospitality industry experience. He will discuss “The Role of Content in Tourism Marketing,” drawing on expertise in revenue, customer service, sales & marketing, and human capital development.
  • Suresh Dissanayake, Assistant Vice President of Sales & Marketing of Heritance Aarah & Adaaran Resorts, with nearly two decades of experience, will shed light on “What does a Sales and Marketing Director Do?” He brings extensive luxury hospitality experience and a proven track record in sales, distribution, and marketing.
  • Vishal Amir Ahmed, a versatile cinematographer and content creator, will explore “Who is a Content Creator.” Currently associated with Various Arts Studio, he specialises in providing multimedia solutions to various clients.

Organised by Maldives Insider, Maldives Virtual Tour, Travel Trade Maldives, and Hotelier Maldives, this collaborative effort aims to empower Maldives-based travel content creators and elevate the Maldives as a premier destination for captivating travel storytelling.

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Acclaimed contemporary artist Ana Pušica explores perpetuality and community at Patina Maldives

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Ana Pušica Kramer, an internationally  acclaimed contemporary artist, joins Patina Maldives for an exclusive  art residency in the now infamous Fari Art Atelier. From January 22 to  February 22, 2024, Ana Pušica will grace the shores of the Fari Islands,  weaving a vibrant narrative of colour and emotion across her larger  than-life canvases. 

Her artistry transcends boundaries, melding abstraction and figuration into awe-inspiring masterpieces. Having exhibited globally, from New York to Beijing, Ana’s paintings are a physical, intuitive act rooted in movement.  Described as a “beautiful fluorescent thunderstorm,” Ana’s art explores light and colour, capturing the energy of life itself. 

The Fari Art Atelier which has previously hosted the likes of Daniel Arsham, Chris Stamp and David Nott, will be transformed into Ana’s studio and gallery showcasing her enthralling artworks—a mesmerising journey through poetry, memory, and the vibrant interplay of colour. Guests at Patina are invited to delve into Ana’s world, where each stroke reveals layers of meaning, evoking sensations of intense lightness and boundless interpretation. 

At Patina Maldives, Ana will immerse herself in a month-long residency, inviting the Patina Malidves community or guests and team to witness her artistic fervour firsthand. Guests will have the rare opportunity not only to observe her creative process but also to engage with and create art alongside this luminary.

Experience artistry at its most exclusive

Art Exhibition
Experience Ana’s captivating exploration of colour and emotion in her spellbinding artworks displayed at the Fari Atelier.

Art Workshops: Message in a Bottle
As part of a collaborative artwork, Ana invites Patina guests to participate in short workshops, actively contributing to the creation of a permanent installation at Patina Maldives.

Open Studio Session
Join Ana for an exclusive open studio session, offering guests a behind the-scenes look at her creative process.

Ana Pušica residency package
Discover a world where creativity knows no bounds as Ana Pušica, the maestro of contemporary art, transforms Patina Maldives into an immersive canvas of inspiration.

Book now to secure your experience.
For more information and reservations, please visit Patina Maldives or contact
reservations.maldives@patinahotels.com

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