Aviation, Aerospace Face Troubled 3Q20Thu, 10/29/2020 - 14:53
Aerospace and aviation companies across the globe reported troubled third quarters as the COVID-19 pandemic continues ravaging the world. As air traffic continues below 2019 levels, airlines are trying to save costs, with Aeroméxico preparing to let go part of its workforce. The blues airlines and airports face have extended to the aerospace sector, with giant Airbus and Boeing reporting revenue drops in 3Q20.
Now, jump into this week’s highlights:
Advanced technology exports to the US, including those for the aerospace industry, grew by 2.8 percent in August, reported the US Department of Commerce. While these exports fell at the beginning of the year, they have linked three months of growth after increasing by 6.3 percent in June and 6.9 percent in July.
Infrastructure works to host FAMEX 2021 at Queretaro Intercontinental Airport (AIQ) started this week, announced Marco Antonio del Prete Tercero, Queretaro’s Minister of Sustainable Development. The works involve a MX$23 million (US$1.08 million) investment and include a parking space for aircraft and a taxiway connecting strip.
Airport operator Grupo Aeroportuario del Pacífico (GAP) reported a 55.2 percent contraction in its 3Q20 cashflow. The group operates 12 airports in Mexico including the international airports of Guadalajara and Tijuana.
Aeroméxico received court’s approval to fire 766 flight assistants. The airline, which filed for bankruptcy protection earlier this year, is still trying to reduce its costs and restructure its finances to weather the COVID-19 outbreak.
US planemaker Boeing reported a 29 percent drop in revenue in 3Q20, ending with a negative cashflow of US$4.82 billion. The aerospace giant continues suffering the aftereffects from the two 737 Max crashes, which led to a global grounding of these aircraft that continues to this day. Its problems only worsened due to the COVID-19 outbreak. The company readjusted its jet production several times throughout 2020. Boeing CEO Dave Calhoun announced that the company would eliminate 30,000 jobs by the end of 2021.
French planemaker Airbus also reported a troubled third quarter as it delivered 40 percent less jets year on year, which reduced revenue for the period to €30.2 billion (US$35.3 billion), a 34.6 percent contraction from 3Q19.
The International Air Transport Association (IATA) warned governments across the globe that the industry could see significant job losses, as airlines were unable to cut down costs sufficiently to offset the significant amount of cash they are burning. The association warned that international flights are down by about 90 percent, further slowing the recovery of the beleaguered sector. 2021 might be no better, with revenue expected to be 46 percent smaller than in 2019.