Boeing (NYSE:BA) stock rose 8% on Thursday in the after-market trading session. The company announced that it will resume commercial aircraft production in the Seattle area. The stock closed 8.0% lower on April 16. Like other industrials stocks, Boeing also has been struggling since the coronavirus pandemic hit. Many companies halted production. Boeing made the hard decision in March to halt production.
Boeing will resume commercial aircraft production
According to CNBC, Boeing announced on Thursday that it will resume commercial aircraft production in the Seattle area. The production will include the 747, 767, 777, and 787 jet programs. Resuming production will bring close to 27,000 employees back to work. According to Reuters, the company mentioned that the production for 747, 767, and 777 aircraft will resume on April 20. Meanwhile, the production for 787 aircraft will start on April 23 or April 24.
When the COVID-19 pandemic hit in March, Boeing suspended the production at its facilities. Around 100 Boeing employees contracted the coronavirus, as reported by CNBC. On April 6, the company temporarily shut down the production at its 787 facilities in South Carolina. The announcement came after South Carolina Governor Henry McMaster issued a stay-at-home order.
The company stated it will follow the guidelines issued by health authorities and practice social distancing. The safety measures include staggered shift timings, adding floor markings to maintain physical distance, and providing face masks for employees. The company will also conduct wellness checks and temperature screenings.
Boeing CEO Dave Calhoun seems optimistic about the progress that airlines made toward getting billions in government aid amid the pandemic. According to Reuters, the Department of the Treasury and ten airlines agreed to $25 billion in aid for airlines.
Boeing generates a substantial portion of its revenue from manufacturing aircraft. However, the revenues will likely take a hit amid COVID-19. Calhoun said, “Our team continues to focus on the best ways to keep liquidity flowing through our business and to our supply chain until our customers are buying airplanes again.”
As of April 16, the stock has lost 41.8% and 58.7% YTD (year-to-date). Boeing stock has underperformed the Dow Jones and the S&P 500, which have fallen by 17.5% and 13.2% YTD. The iShares US Aerospace & Defense ETF (NYSEARCA:ITA), which has fallen 33.5%, has also outperformed Boeing this year.
So far, Boeing has fallen 9.9% in April. Meanwhile, Spirit AeroSystems (NYSE:SPR) and General Electric (NYSE:GE) have fallen 20.2% and 21.4% in April. In pre-market trading as of 8:53 AM ET today, Boeing stock has risen 11.2%.
Airline stocks are also struggling amid the COVID-19 pandemic. COVID-19 hit the airline industry the hardest due to global travel restrictions. The US government issued restrictions on non-essential travel. Boeing decided to cut its workforce by 10%. As the pandemic continues, the demand for Boeing jets will decline, which could impact the stock more.