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Conglomerate posts roughly $2 billion quarterly loss, but executives predict profits and cash will improve in second half of year
General Electric Co. GE -4.35% posted a roughly $2 billion quarterly loss as revenue tumbled 24%, hurt by a steep decline in a jet-engine business that has been hobbled by the coronavirus pandemic.
The aviation business, once a profit engine for GE, swung to a loss in the June quarter as both revenue and orders plunged. The unit produces engines for Boeing Co. BA -3.72% and Airbus SE planes but has had to cut production and jobs as airlines delay orders. On Wednesday, Boeing said it would cut further production of commercial jets.
GE reported it burned through less cash in the June quarter than it had previously warned. The company reported adjusted negative cash flow from industrial operations of $2.1 billion, compared with its projection of negative $3.5 billion to $4.5 billion in May. Analysts were expecting negative cash flow of $3.29 billion, according to FactSet.
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Aerospace company starts forced layoffs as it reduces jetliner production
Boeing Co. BA 3.31% intends to shed more than 13,000 employees, the plane maker said Wednesday, including the first round of compulsory cuts as part of previously announced plans triggered by the coronavirus-driven collapse in global air travel.
The initial tranche of cuts is far larger than indicated on Tuesday by union officials. The aerospace company said the layoff notices delivered this week will be the largest part of plans announced last month to shed about 10% of its 160,000-strong global workforce this year as it reduces jetliner production in response to airlines’ inability and unwillingness to take new aircraft after huge declines in passenger traffic.
Boeing announced roughly 6,770 involuntary layoffs among U.S. employees, while a further 5,520 had been approved for voluntary severance packages and will leave over the next few weeks.
The company said it had completed its voluntary-layoff program after offering staff buyouts last month, with several thousand more jobs set to go under compulsory cuts over the next several months. They mark the first major reductions by the company since 2017, when it laid off roughly 1,500 workers as part of a wider cost-cutting drive.
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Before they can return to pre-pandemic profitability, travel-dependent businesses must win back customers’ trust
Travel and leisure companies planning and hoping for the return of business are working to make sure customers feel safe.
That confidence can’t be instilled only through advertising and messaging, executives say. It also depends on the customer experience, including what people can see with their own eyes.
“It’s about communicating the cleanliness factor optically,” said Janis Cannon, senior vice president of upscale brands for Choice Hotels International Inc., a franchiser whose hotels range from budget to high-end.
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Landing gear on Pakistan International Airlines jet may not have been deployed; 97 died in crash Friday
ISLAMABAD—A Pakistani-led investigation into a deadly air crash Friday will examine whether the jet’s engines were damaged in an aborted first landing, causing a loss of power when the plane circled around for a second landing, officials familiar with the probe said.
Initial evidence suggests the engines of the Pakistan International Airlines jet made contact with the runway in Karachi when the pilot attempted to land without landing gear deployed, the officials said. Marks on the runway indicate the engines were dragged along it, while flight-altitude data and eyewitness accounts say that the plane took off again, they said.
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Industry is working to curb pandemic risks that have brought air traffic to a near standstill
Boeing Co. BA 3.31% and Airbus EADSY -0.94% SE are researching the new coronavirus’s behavior inside jetliners, part of an industry push to curb risks that have brought air traffic to a near standstill.
Their work will involve academics, engineers and medical experts expected to examine new measures to prevent disease transmission on airplanes, according to the companies and people involved in their discussions.
The effort to better understand air-travel risks during the pandemic comes as airlines try to reassure nervous passengers that masks and filtered cabin air provide reliable protection from infection in flight. Global air traffic has plunged as governments closed borders and ordered would-be fliers to stay home.
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A Q&A for anyone confused about traveling right now: How to stay healthy, how to get a refund when you cancel a trip, and when it might be safe to travel again
Is there any place abroad that’s safe to travel right now?
In a nutshell, no. The novel coronavirus has spread to more than 100 countries and every continent except for Antarctica. In March, the U.S. State Department issued its sternest warning against international travel, citing the escalating coronavirus outbreak around the globe, increasing travel restrictions, quarantines and airline cancellations. The Level 4 advisory, which means “Do Not Travel,” is the highest level, typically issued for war zones but here applied to all international destinations. The State Department also urged those U.S. citizens already abroad to return immediately or prepare to stay outside of the U.S. indefinitely. Even apart from the State Department warning, American travelers won’t be welcomed in the growing number of countries that are closing their borders to nonresidents, including Canada, the 26 countries in the European Union, India, Israel and Australia. And due to the high number of confirmed cases on cruise ships, the CDC and the U.S. State Department are advising travelers, particularly those with underlying health issues, to avoid all cruise trips. The CDC also recommends older adults and travelers with underlying health issues to avoid long plane trips.
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With the huge decline in air travel, those still flying have plenty of room. Maybe everyone was running late, Juan Grimaldo thought.
It was earlier this month at the Phoenix airport, and Mr. Grimaldo, 22, had just arrived at his gate. He had finished a stint working on a construction site and bought a cheap American Airlines ticket home to El Paso, Texas. He knew the coronavirus pandemic would keep most people at home, but there wasn’t another passenger in sight.
As he approached, the gate attendant greeted him by name. That was odd, he thought. He boarded, bemused. A sea of empty rows gaped. “Then it hit me,” he says. “I was the only one on the plane.”
To fly is an experience that upends a sense of space and time. In the wake of the coronavirus, with millions of Americans sheltering in place, that is truer than ever. Airports sit eerily empty, symbols of how the virus has devastated the economy and airlines in particular. Air passenger numbers are down a whopping 95%, according to U.S. government data, with many airline workers laid off or furloughed.
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David Calhoun tells plane maker’s shareholders he doesn’t expect air travel to return to 2019 levels for two or three years
Air traffic may not bounce back for two or three years, Boeing Co. BA -0.23% Chief Executive David Calhoun said, outlining the tough outlook for global aviation to the plane maker’s shareholders on Monday.
“The health crisis is unlike anything we have ever experienced,” Mr. Calhoun said at the annual meeting. “It will be years before this returns to pre-pandemic levels.”
Mr. Calhoun laid out the coronavirus pandemic’s toll on the industry: Global airline revenues are set to drop by $314 billion this year. In the U.S., more than 2,800 planes are idled. Passenger demand is down 95% from last year.
“We are in an unpredictable and fast-changing environment, and it is difficult to estimate when the situation will stabilize,” he added. “But when it does, the commercial market will be smaller and our customers’ needs will be different.”
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