Boeing cuts 787 production after second straight quarter of losses

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FILE PHOTO: A Boeing logo is seen at the company’s facility in Everett after it was announced that their 777X model will make its first test flight later in the week in Everett, Washington, U.S. January 21, 2020. REUTERS/Lindsey Wasson

(Reuters) – Boeing Co (BA.N) reported a loss for the second straight quarter and said on Wednesday it would cut its workforce by about 10% as the planemaker further reduces 787 Dreamliner production against a slump in global travel demand.

The planemaker said it was confident of getting sufficient liquidity to fund its operations, sending its shares up 5.4% in premarket trading.

Boeing, which last month drew down its entire $13.8 billion credit line, is working with investment banks on a potential bond deal worth at least $10 billion, Reuters reported on Tuesday.

Demand for Boeing’s bigger and more profitable 787 jet had waned as a result of the U.S.-China trade war. The pandemic has made it more difficult for the company to sustain production of the aircraft, which is its main source of cash at a time when the 737 MAX remains grounded.

Boeing said it plans to cut the jet’s production to seven units per month by 2022. In October, it had decided to lower it to 12 per month in late 2020 from 14 and to 10 aircraft per month in early 2021.

Boeing also said it expects to resume 737 MAX production at low rates in 2020, but did not give a timeline.

The company’s adjusted loss stood at $1.70 billion, or $1.70 per share in the first quarter, compared with a profit of $1.99 billion, or $3.16 per share, a year earlier.

Reporting by Ankit Ajmera in Bengaluru; Editing by Arun Koyyur

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