Boeing supplier Spirit AeroSystems posts Q2 loss

Main 737 supplier struggling with COVID-19 and MAX grounding and expects forward losses in Q3 of US$25 million to US$35 million on Boeing 787 programme and US$13 million to US$20 million on Airbus A350 programme.

Boeing 737 MAX and NG fuselages waiting to enter the plant in Washington state. (PHOTO: Shutterstock)

Spirit AeroSystems, the main US supplier for Boeing’s troubled 737 MAX plane, posted a second quarter net loss of US$256 million compared to a net profit of US$168 million a year ago. The company announced on Tuesday (4 August) that it will be severely cutting the number of fuselages or shipsets it delivers to Boeing for the MAX as the plane remains grounded and may not fly again until 2021. The plane was grounded following two crashes that killed 346 people.

A Spirit AeroSystems plant. (PHOTO: Spirit AeroSystems)

The company, based in Wichita, Kansas in the US, said it has been “directed” by Boeing to produce a total of 72 737 shipsets in 2020, which is an 88 percent reduction from the 606 shipsets it delivered in 2019. The company also said it has recorded forward losses of US$194 million, primarily on its B787 and A350 programmes “due to greater customer production rate reductions than previously assumed”. As a result of the slowdown in global aviation and the major troubles facing Boeing, Spirit said it has also been force to cut its workforce by 8,000 so far and cut costs by at least US$1 billion. The company said it has closed one of its facilities located in San Antonio, Texas and it may close others if the crisis facing the industry continues.

Tom Gentile, Spirit’s president and CEO. (PHOTO: Spirit AeroSystems)

“The dual challenges of the MAX grounding and COVID-19 continue to have a significant negative impact on the global aviation industry,” said Tom Gentile, Spirit AeroSystems president and CEO. “Spirit production levels in the quarter fell 65 percent from last year and 51 percent from the first quarter. We continue to adjust our cost base to align with the lower levels of production and to preserve liquidity. While the production outlook remains volatile, our current projections demonstrate that we will maintain sufficient liquidity for operations over the next 12 months. During this slow period, we continue to make productivity improvements throughout our production system and continue to win new work in an effort to diversify our business so that we can emerge as a stronger company once production rates on commercial aircraft return to higher levels.”

Spirit’s second quarter revenue was US$644.6 million, down from the same period of 2019, primarily due to the significantly lower 737 MAX production resulting from the grounding of the programme and the impacts of COVID-19. Deliveries decreased to 159 shipsets during the second quarter of 2020 compared to 449 shipsets in the same period of 2019, including Boeing 737 MAX deliveries of 19 shipsets compared to 147 shipsets in the same period of the prior year. Spirit’s backlog at the end of the second quarter of 2020 was approximately US$41 billion, with work packages on all commercial platforms in the Boeing and Airbus backlog.

The 737 MAX, for which Spirit AeroSystems makes the fuselages, has been grounded for more than a year following two crashes that killed 346 people. (PHOTO: Shutterstock)

Spirit said the Q2 financial results “do not contemplate the anticipated impacts of lower production rates by Boeing and Airbus that have developed after the end of the second quarter. The company is currently evaluating the potential impacts to the Boeing 787 and Airbus A350 programmes. Based on preliminary assessments, the company expects to incur incremental forward losses in the third quarter of 2020 of approximately US$25 million to US$35 million on the Boeing 787 programme and US$13 million to US$20 million on the Airbus A350 programme. As a result of the uncertainty that exists regarding customers’ specific production rates and duration for such rates, and the actions the company may take to recalibrate its cost structure in response to our customers’ decisions, the amount of forward losses recognised in the third quarter of 2020 may be materially different than the ranges provided.”

For Editorial Inquiries Contact:
Editor Matt Driskill at
For Advertising Inquiries Contact:
Head of Sales Kay Rolland at

AAV Media Kit
Previous articleIATA names new senior vice president
Next articleMelbourne Airport turns to the sun
Matthew Driskill is the Editor of Asian Aviation and is based in Cambodia. He has been an Asia-based journalist and content producer since 1990 for outlets including Reuters and the International Herald Tribune/New York Times and is a former president of the Foreign Correspondents Club of Hong Kong. He frequently appears on international broadcast outlets like CNN, Al Jazeera and the BBC and has taught journalism at Hong Kong University and the American University of Paris. Driskill has received awards from the Associated Press for Investigative Reporting and Business Writing and in 1989 was named the John J. McCloy Fellow by the Graduate School of Journalism at Columbia University in New York where he earned his Master's Degree.


Please enter your comment!
Please enter your name here