A Lufthansa Boeing 747 aircraft rolls over the tarmac at the airport in Frankfurt, Germany on March 7. (AP Photo/Michael Probst)

A Lufthansa Boeing 747 aircraft rolls over the tarmac at the airport in Frankfurt, Germany on March 7. (AP Photo/Michael Probst)

Boeing imposes hiring freeze in response to virus outbreak

The company received 18 orders last month for new large planes but continues to lose orders for the 737 Max.

By David Koenig / Associated Press

Boeing is painting a sobering picture for its business in 2020.

The Chicago-based company said Wednesday it has imposed a hiring freeze in response to the virus outbreak that is undercutting air travel and threatening to kill airlines’ appetite for new planes.

It said it received 18 orders last month for new large planes, but 46 orders were canceled, most of them for the grounded 737 Max, leaving the company with a net loss of 28 orders in February.

Boeing is also restricting employees’ travel and discretionary spending and limiting overtime to work on getting the Max back in flight.

Shares of Boeing Co. were down more than 15% in afternoon trading. They have plunged 55% in just over a year.

“The year ahead is shaping up to be as challenging for our business as any in the recent past,” CEO David Calhoun and Chief Financial Officer Greg Smith said in a note to employees. “On top of the work of safely returning the 737 Max to service and the financial impact of the pause in Max production, we’re now facing a global economic disruption generated by the COVID-19 coronavirus.”

The warning about 2020 is a strong statement considering that Boeing is facing its biggest crisis in decades after two deadly crashes involving Max jets and just posted its first full-year loss since 1997.

Indeed, 2020 is off to an ominous start for Boeing. It reported no orders for new commercial planes in January while rival Airbus racked up 274 orders. Boeing’s 18 orders in February were all for so-called widebody or twin-aisles jets — larger planes that are typically used for long flights.

Through Feb. 29 Boeing has reported a loss of 43 orders for the Max, as customers switched those orders to other models. For example, Air Lease Corp., which leases planes to airlines, swapped 9 Max orders Maxs for three larger 787 jets, and Oman Air converted 10 Maxes into four 787s.

The company delivered 30 planes in the first two months of the year compared with 95 a year earlier, before it halted shipments of Max jets. Boeing depends on deliveries to generate cash flow.

Airlines, however, are retrenching to survive a sharp downturn in travel — they are unsure how long it will last.

The three largest U.S. airlines — Delta, American and United — and several international carriers have announced deep cuts to their schedules. The International Air Transport Association, an airline trade group, estimates that the virus could cost airlines up to $113 billion in lost revenue, with the biggest losses in Asia, whose fast-growing airlines were on a buying spree for new jets.

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Business

Lily Lamoureux stacks Weebly Funko toys in preparation for Funko Friday at Funko Field in Everett on July 12, 2019.  Kevin Clark / The Herald)
Everett-based Funko ousts its CEO after 14 months

The company, known for its toy figures based on pop culture, named Michael Lunsford as its interim CEO.

The livery on a Boeing plane. (Christopher Pike / Bloomberg)
Former Lockheed Martin CFO joins Boeing as top financial officer

Boeing’s Chief Financial Officer is being replaced by a former CFO at… Continue reading

Izaac Escalante-Alvarez unpacks a new milling machine at the new Boeing machinists union’s apprentice training center on Friday, June 6, 2025 in Everett, Washington. (Olivia Vanni / The Herald)
Boeing Machinists union training center opens in Everett

The new center aims to give workers an inside track at Boeing jobs.

Some SnoCo stores see shortages after cyberattack on grocery supplier

Some stores, such as Whole Foods and US Foods CHEF’STORE, informed customers that some items may be temporarily unavailable.

People take photos and videos as the first Frontier Arlines flight arrives at Paine Field Airport under a water cannon salute on Monday, June 2, 2025 in Everett, Washington. (Olivia Vanni / The Herald)
Water cannons salute Frontier on its first day at Paine Field

Frontier Airlines joins Alaska Airlines in offering service Snohomish County passengers.

Amit B. Singh, president of Edmonds Community College. 201008
Edmonds College and schools continue diversity programs

Educational diversity programs are alive and well in Snohomish County.

A standard jet fuel, left, burns with extensive smoke output while a 50 percent SAF drop-in jet fuel, right, puts off less smoke during a demonstration of the difference in fuel emissions on Tuesday, March 28, 2023 in Everett, Washington. (Olivia Vanni / The Herald)
Sustainable aviation fuel center gets funding boost

A planned research and development center focused on sustainable aviation… Continue reading

Helion's 6th fusion prototype, Trenta, on display on Tuesday, July 9, 2024 in Everett, Washington. (Olivia Vanni / The Herald)
Helion celebrates smoother path to fusion energy site approval

Helion CEO applauds legislation signed by Gov. Bob Ferguson expected to streamline site selection process.

Pharmacist John Sontra and other employees work on calling customers to get their prescriptions transferred to other stores from the Bartell Drugs Pharmacy on Hoyt Avenue on Wednesday, July 2, 2025 in Everett, Washington. (Olivia Vanni / The Herald)
Bartell Drugs location shutters doors in Everett

John Sontra, a pharmacist at the Hoyt Avenue address for 46 years, said Monday’s closure was emotional.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.