BOEING WILL CUT THOUSANDS MORE JOBS. As the economic shutdown took its toll on the airline industry, the company earlier announced cutting 10 percent of its 160,000-strong labor force.
Now Boeing says it plans to end 2021 with a staff of 130,000, which means letting go of another 14,000 workers.
About 19,000 workers already have left the company, but Boeing has added jobs in its national defense-related businesses.
Boeing announced the new round of cuts after reporting a third-quarter loss of $466 million, compared to a profit of $1.2 billion a year previous. The company posted revenues of $14.1 billion, 29 percent less than a year earlier but better than analysts’ forecast of $13.9 billion.
Boeing has lost a net 381 orders for new planes this year through September, according to company information, and Boeing said in a 6 October statement that the pandemic and global economic shutdown could dampen airlines’ demand for new planes until 2030.
AIRLINES CRASHING. Facing new government shutdowns in several countries and travelers’ continued reluctance to board planes while the COVID virus hangs over Europe, the continent’s major airlines cut their fourth-quarter schedules.
Air France is cutting its flights from the previously announced 50 percent of 2019 levels to 35 percent.
KLM has reduced its November schedule from the planned 45 percent to 35 percent.
British Airways and Aer Lingus will cut its schedule from 40 percent to 30 percent.
Lufthansa said it will chop its schedule in half to 25 percent, down from the 50-percent capacity it had planned by year’s end, and will ground another 125 jetliners.
Air France – KLM Group posted a €1.67-billion loss in the third quarter and warned even worse results are due in the fourth.
International Airlines Group, which owns British Airways and Aer Lingus, reported losing €1.76 billion during the period, compared to a €1-billion profit a year before.
Although the company has cut costs by 54 percent, it still is burning €205 million a week.
Lufthansa reported cutting its cash burn in half, from €1 million every hour to €1 million every two hours.
The figures were included in companies’ quarterly reports.
EUROPEAN MALLS, MALLED. Because of renewed business closures, shoppers’ migration online, and people’s recurring reluctance to visit public places, Europe’s mall owners face a grim future, Moody’s Investors Service said in a late October report.
“We expect a significant deterioration in retail landlords’ rental income for at least the next 18 months as the coronavirus pandemic makes the operating environment even harder,” the report said.
Mall owners already face shrinking demand for retail space, rising vacancy rates, and unpaid rents.
By the end of 2021, retail properties across Europe will shrink in value by 15 to 20 percent against a June 2020 baseline, with U.K. property values declining 30 percent, Moody’s predicted.
Malls make up a greater share of Britain’s retail real estate than elsewhere in Europe, according to the Financial Times.
Europe’s online retail sales spiked 32 percent in the second quarter year on year, according to Haver Analytics, and Moody’s expects them to increase by 50 percent in the near future to 15 percent of the continent’s retail revenue.
Major mall owners Hammerson and Unibail-Rodamco-Westfield have issued new stock to shore up their finances.
RAYTHEON ANNOUNCES MORE LAYOFFS. The largest U.S. supplier of airplane parts and systems will lay off 5,000 workers in addition to the 15,000 it announced previously.
The company will cut 20 percent of workers in its commercial division and will reduce office and factory space by as much as 25 percent, Raytheon said in a statement.
The company also has terminated 1,000 office workers and cut its number of contractors in half to 4,000.
Raytheon’s sales to Boeing will be about 40 percent less this year than last, CEO Greg Hayes said in a phone call last week with investors. Raytheon’s third-quarter profits were down 77 percent, he noted. The company’s share price fell 7 percent on 27 October.
Hayes was upbeat about Raytheon’s defense business but recently other defense contractors have reported slower Pentagon spending as the federal deficit and debt have ballooned under the government’s $4-trillion economic rescue plan.
AMC BOND VALUES CRASH. The price of $500 million worth of bonds issued by AMC Holdings, the world’s largest move theater chain, plunged below 10 cents on the dollar during the week of 19 October, MarketAxess reported.
The bonds come due in April 2025.
The price was 91 cents on the dollar as recently as September.
In contrast, the company’s stock price rose 16 percent on 19 October when AMC announced it would reopen 12 New York City theaters, although at only 25-percent capacity. A day later, AMC announced it would issue $50 million worth of new stock to shore up its finances.
The stock’s price rose 4 percent to $3.12 on 22 October.
However, the company is burning $100 million a month, analysts say, and movie studios have put off until next spring the release of new blockbuster movies that could draw virus-fearing audiences back to theaters.
Last month, Cineworld’s Regal Entertainment Group canceled a planned August reopening of its more than 600 theaters and suspended operations indefinitely.
GAP INC. TO CLOSE MOST MALL STORES. The 350 closures of Gap and Banana Republic stores will take place through 2023 and make up about 30 percent of the company’s sites, Gap said in a statement announcing the closures. After the stores are shut down, 80 percent of the two brands’ shops will be outside of malls.
The decision reflects a major retailer’s dark view of the shopping enclaves’ future.
Gap also plans to open 100 Athleta stores by 2023, according to Forbes, which reported that the company told investors that 70 percent of its revenue by 2023 will come from its Athleta and Old Navy brands.
FRIENDLY’S RESTAURANTS MAKE FRIENDS WITH BANKRUPTCY COURT. The 130-store restaurant chain known in the Northeast for its “Fribble” milkshakes filed Chapter 11 bankruptcy on 1 November, reporting liabilities of $50 million to $100 million and assets of no more than $10 million.
The company had been struggling before the pandemic arrived. It had closed unprofitable stores, changed its menu, and revamped its marketing.
The company will be sold to Amici Partners Group for just under $2 million, a price that will allow most locations to remain open and many of the company’s 1,700 workers to keep their jobs.
