Sydney/Montreal, The pandemic is taking its toll on aerospace manufacturing, as Boeing Co announced it would halt production of most widebody jets and Airbus SE restarted only partial output after a four-day shutdown as suppliers cut jobs.
With airlines unable to fly because of a collapse of demand over fears of contagion, reinforced by air travel restrictions, planemakers and their suppliers are under pressure to save cash to ride out a squeeze on liquidity, Reuters reported.
Moody’s cut its outlook for the aerospace and defense industry to negative from stable and warned that even when markets recover, the damaged balance sheets of most airlines would hurt demand for new aircraft.
Global passenger capacity fell by 35% last week, the worst since the start of the crisis, according to data from airline schedules firm OAG, which said deeper cuts were likely in the coming weeks.
More than 2,500 planes have already been grounded this year, data from Cirium shows, with taxiways, maintenance hangars and even runways at major global airports turning into giant parking lots.
The International Association of Machinists and Aerospace Workers on Monday said in a letter to Congress that more than 500,000 U.S. aerospace production jobs could be in jeopardy and called for a relief package that included provisions to protect against layoffs.
Engine maker GE Aviation announced plans to cut its U.S. workforce by around 10%, according to a letter to staff.
GE’s aviation unit employed about 52,000 people globally as of 2019, with about half of them working in the United States.
The shutdowns are designed in part to allow for deep cleaning and the re-organisation of factory workers, who must stand further apart and avoid working in clusters, slowing output.
But analysts expressed doubts over the strength of future demand as the industry recovers from its worst crisis.
Source: Bahrain News Agency