Boeing CEO Kelly Ortberg has announced that the company will need to delay the launch of the 777X and lay off approximately 10% of its workforce as the machinist strike continues. The 777X was originally scheduled to launch in 2025, but due to the strike and a pause in flight-testing, the first delivery is now expected in 2026. Ortberg stated that Boeing has notified all customers of the delay, including prominent carriers such as Emirates, Lufthansa, Qatar Airways, Etihad, and Singapore Airlines. Some airline executives were already skeptical that the 777X would be delivered in 2025.
Emirates President Sir Tim Clark has expressed doubts that the 777X would start operating until 2026, citing delays in delivery. The Dubai-based carrier currently has the largest order for the 777X at 205 planes, according to Boeing figures from September. The company is also discontinuing the 767 cargo plane as part of its restructuring efforts. U.S. carriers, such as United Airlines and Southwest Airlines, have implemented strategies to deal with potential delays in deliveries due to the strike, such as introducing red-eye flights and making service cuts.
Boeing CEO Kelly Ortberg announced that the company will be laying off about 10% of its workforce, affecting executives, managers, and employees. This decision comes after talks with the International Association of Machinists and Aerospace Workers broke down, with Boeing withdrawing an offer that included a 30% pay raise over four years, while the union was seeking a 40% increase. Previously, the company had furloughed white-collar employees and frozen hiring, but Ortberg stated that they would end the furloughs due to the layoffs. Ortberg emphasized the need to make tough decisions and structural changes to remain competitive and deliver for customers in the long term.
The Airlines Sector Stock Index Performance Year-to-Date shows the performance of airline sector stocks within the ST200 index. This index includes publicly traded companies across global markets, including network carriers, low-cost carriers, and related companies. The Skift Travel 200 (ST200) combines the financial performance of nearly 200 travel companies worth over a trillion dollars into a single number. The index provides insight into the financial health and performance of the airline industry as a whole. The full methodology behind the Skift Travel 200 can be accessed for more information.
In conclusion, Boeing is facing challenges due to the ongoing machinist strike, leading to delays in the launch of the 777X and layoffs of approximately 10% of its workforce. Prominent carriers have expressed doubts about the timely delivery of the 777X, impacting Boeing’s business operations. U.S. airlines are preparing for potential delays in deliveries and have implemented strategies to mitigate the impact of the strike. Boeing is making major cuts to its workforce and restructuring its operations to stay competitive in the long term. The performance of airline sector stocks within the ST200 index provides valuable insights into the overall financial performance of the airline industry.
