Airlines

Boeing’s 737 MAX Production Increase Signals Rebound Amid Challenges in Defense Segment

Boeing announced on Wednesday that it was increasing the output of its popular 737 MAX narrowbody airplane to 38 per month from 31, a hint that the company was rebounding from a supplier glitch that had disrupted its ambitions for an early ramp-up. Boeing reaffirmed its intention to produce $3 billion to $5 billion in cash from operations this year and to ship at least 400 single-aisle 737s and 70 787 Dreamliners by the year 2023.

In response to the recent collapse of a railway bridge used to transport 737 fuselages, CEO Dave Calhoun stated the company still faces difficulties, “whether they be issues to address within our own factories or outside our walls within the supply chain and logistics routes.”

Boeing will ‘very shortly’ increase 737 MAX manufacturing to 38 per month.(Opens in a new browser tab)

As airlines try to expand their fleets after the epidemic, the drive to build 38 MAXs a month coincides with increased travel demand.

Stan Deal, the president of Boeing Commercial Aeroplanes, stated in June that the business would increase narrowbody manufacturing to 38 a month “very soon.” A few days later, at the Paris Air Show, Boeing signed an agreement with Air India for the purchase of 190 MAXs as part of a larger 470 aircraft order that was shared between Boeing and Airbus.

Bonza becomes first Australian airline to take delivery of the new 737 MAX(Opens in a new browser tab)

Boeing’s commercial aircraft segment may be recovering, but its defence branch is still having trouble. A loss of $527 million was incurred in the second quarter as a result of problems with three significant fixed-price programmes, including NASA’s Starliner capsule, the T-7 jet trainer for the US Air Force, and the US Navy’s MQ-25 tanker drone. These problems were caused by failures on some fixed-price development programmes, labour unrest, and supply chain disruptions.

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Airlines

German Carrier Lufthansa Plans for 20% Job Cuts in Administration

Lufthansa Airlines is reportedly planning significant job cuts in its administrative workforce. According to Manager Magazin, the German carrier intends to reduce administrative positions by 20% as part of its cost-cutting measures amidst an anticipated decline in earnings.

This reduction could impact approximately 400 jobs, the report revealed. While Lufthansa has not directly commented on the layoffs, the airline confirmed its goal of cutting administrative costs by 20% by 2028.

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The strategy involves leveraging digital technologies, including artificial intelligence and automation. “A hiring freeze is currently in place for administrative roles at Lufthansa Airlines,” said a company spokesperson.

The staff reduction is expected to occur through natural attrition and age-related turnover, rather than forced layoffs. The internal projection cited by the magazine warns that Lufthansa could face an operating loss of €800 million ($843.92 million) by 2026 if no corrective measures are taken.

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The report highlights the challenges companies face in aligning workforce requirements with current and future demands. Failure to adapt could necessitate drastic actions, such as restructuring and layoffs, which carry significant repercussions for both the organization and its employees.

As Lufthansa navigates these challenges, the airline appears committed to balancing cost efficiency with digital transformation to maintain its competitiveness in a rapidly evolving industry.