Aircraft manufacturer Boeing will lay off about 230 workers from its Melbourne manufacturing plant as part of a worldwide redundancy round in response to the coronavirus pandemic, which has wiped out global demand for new aircraft.
The Chicago-headquartered aerospace giant on Friday confirmed the redundancies at its Port Melbourne facility that employs around 1100 people making wing parts and other components for Boeing 787, 777 and 737 aircraft.
Boeing employees working on a wing component at its Port Melbourne factory in 2014. About 230 of the facility's 1100 staff will be made redundant. Credit: Luis Enrique Ascui
“This is clearly a very difficult time for our industry, our customers, and our employees,” said Brendan Nelson, president of Boeing Australia, New Zealand and the South Pacific and former federal Liberal opposition leader.
“I deeply regret the impact that this will have on our teammates and their families during an already stressful time."
Boeing was already reeling from the 13-month long grounding of its 737 MAX aircraft following two deadly crashes involving the best-selling jet and now faces a dire market for new aircraft sales as the pandemic causes travel demand to plunge, with no certainty about when it will return.
The company on Thursday said it would cut its company-wide headcount by 10 per cent and slow aircraft production, as its first-quarter revenue fell by a quarter.
Boeing was already reeling from the 13-month grounding of its 737 MAX and now faces a dire market for new aircraft. Credit: AP
Boeing's airline customers have been ravaged by the health crisis. Virgin Australia, for instance, went into voluntary administration last Monday, leaving its order with Boeing for 48 737 MAX aircraft under a cloud.
Boeing chief executive Dave Calhoun told US media on Thursday that the pandemic had "frozen" the world's aviation market, with airlines delaying aircraft orders and deliveries. He said it would be two to three years before air travel demand recovers to 2019 levels.
The company also raised US$25 billion ($39 billion) in fresh debt this week to help it deal with the COVID-19 fallout through its largest ever bond offering.
Boeing employs around 4000 people in Australia, New Zealand and the Pacific, and said it would "continue monitor headcount and adjust if necessary based on business needs".
The company's defence arm Boeing Defence Australia and Adelaide-based aerial drone company Insitu Pacific were not affected by the redundancy round, Boeing said in a statement.
ASX-listed travel booker Helloworld said on Friday that its expected Australia's domestic travel market to reopen by September and that travel to New Zealand will be possible in October or November.
However it said other international travel would not resume in any material volume until next year, with a return to past levels not possible until a vaccine or cure for COVID-19 is widely available.