Boeing's commercial airplane deliveries plunged 78% to 20 units in the second quarter of 2019 from 90 units in the year-ago period, as a result of operational shutdowns and weak air travel demand caused by the coronavirus pandemic.
"Our commercial airplane deliveries in the second quarter reflect the significant impacts of the COVID-19 pandemic on our customers and our operations that included a shutdown of our commercial airplane production for several weeks," Greg Smith, Boeing's chief financial officer, said in a statement July 14. "We have and will continue to work with our customers on specific timing and adjustment to deliveries."
Boeing's Q2 deliveries were also less than half the prior quarter's 50 units.
For the first half of 2020, Boeing's commercial airplane deliveries slid 70.7% to 70 units.
Smith said Boeing was closely monitoring the commercial aircraft marketplace and engaging its global customer base to better understand short-term and long-term demand.
"All of this is informing current and future production rates and any further adjustments as needed to balance supply and demand going forward," he said.
Boeing's defense, space and security program deliveries saw less volatility, rising to 44 units in Q2 from 37 units in Q2 2019. However, H1 deliveries in the segment dropped to 83 units from 97 units in the same period last year.
"The diversity of our portfolio including our government services, defense and space programs will continue to provide some stability as we navigate through the pandemic and rebuild stronger on the other side," Smith said.
Aerospace downturn weighs on US aluminum
The downturn in global aerospace demand and Boeing's subsequent production cuts hurt US aluminum manufacturers that supply the aerospace industry.
Kaiser Aluminum CEO Jack Hockema said lower demand from the aerospace sector would dent the company's 2020 revenue total, and recovery in the sector was not expected to occur for at least two to four years.
"We expect value-added revenue for commercial aerospace applications, which represents approximately one-third of our total business, to be down 20% to 25% from 2019," Hockema said June 25 during a virtual presentation at the Goldman Sachs Leveraged Finance Conference.
Hockema said Kaiser's previously announced $375 million expansion at its Trentwood facility in Washington state would be delayed indefinitely depending on the aerospace market.
In June, Arconic said it would indefinitely layoff 154 hourly employees, effective July 19, and permanently layoff about 30 salaried employees, effective June 30, at its Davenport Works in Iowa as a result of reduced demand due to the pandemic.
Davenport Works produces rolled products and components for aerospace applications.
Howmet Aerospace, an engineered metals producer that separated from Arconic in April, said it would likely need to permanently lay off over 600 employees at its Whitehall facility in Michigan due to circumstances that the company "could not reasonably foresee in the form of a sudden and recent reduction in customer orders related to the COVID-19 pandemic."
"The company would have liked to give more notice of this action, but was unable to do so because of how quickly and unexpectedly its business operations were impacted," Howmet said in a Workers Adjustment Retraining and Notification Act notice (WARN) dated June 1.
Howmet supplies the aerospace and commercial transportation industries.
