Aerospace & Defense

Boeing CEO 'hopeful' aircraft demand starts to recover in second half of 2021

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Key Points
  • Boeing posted another loss and plans to cut aircraft production because of weak demand.
  • Aircraft cancellations are outpacing Boeing's new orders and deferrals are on the rise.
Dave Calhoun, Chairman of Boeing.
Adam Jeffery | CNBC

Boeing CEO Dave Calhoun on Wednesday said he was "hopeful" that demand for new aircraft, devastated by the coronavirus pandemic, would start rebounding in the second half of next year.

Cancellations of Boeing planes are outpacing new orders this year as airlines reel from the impact of the virus and the company's key 737 Max remains grounded. Boeing posted a $2.4 billion loss for the second quarter of the year. It is also planning to reduce output and warned about the potential for more job cuts.

"There is a customer calling us every day with a desire to want to defer and to deal with the difficult environments that they are dealing with," Calhoun said in an interview on CNBC's "Squawk on the Street."

Boeing said it plans to delay until 2022 a ramp-up of 737 production to 31 a month, later than a forecast to do so next year. It will also cut output of its 787 wide-body plane to six a month from 10. It will produce just two 777 planes a month from five currently, the company said.

Calhoun said he expects an uneven recovery from the pandemic for airlines around the world and that carriers that emerge healthy might want to gain an advantage over competitors with newer planes, driving demand.

"China, Europe seem to have a little more control over their environments than the U.S. does at the moment," Calhoun said. "It'll happen and I believe somewhere in, depending on a vaccine and the success and distribution of a vaccine, somewhere in the second half of next year I'm hopeful that this worm turns."

Boeing shares were down more than 4% on Wednesday morning.