Spirit AeroSystems (Spirit) the American airframe maker has announced that for the first quarter of 2020, it is likely to post a loss of US$160 million as opposed to a profit of US$163 million for the same period last year, generating approximately U$1.1 billion in first quarter revenue, down about 46% from U$2.0 billion for the same period in 2019.
Having relied on Boeing for roughly 50 percent of its revenue in 2019, Spirit was heavily affected by the ongoing problems of the still-grounded 737 MAX and laid off 2,800 workers in January when the planemaker halted production of the jet and Spirit had to suspend its 737 MAX fuselage work. However, that was pre-COVID-19, the outbreak of which has seen Spirit forced to furlough staff and implement layoffs. Though the company has not issued final first-quarter results, the preliminary announcement of the poor quarter came with confirmation of a US$1.2 billion debt offering which is due to close on April 17 and which the company has indicated it will use for general corporate purposes and to repay other debt.
On April 8 Spirit confirmed it will furlough staff at both Wichita and Oklahoma premises for a period of three weeks. 2020 first-quarter results will include a US$42 million one-off expense relating to cost- and workforce-trimming measures, US$25 million related to COVID-19 production suspension, US$73 million from the 737 Max fuselage production suspension, and U$65 million in retirement plan expenses.
As at the end of March, Spirit held US$1.8 billion in cash and plans for the acquisition of both Asco and Bombardier aerostructures for a combined US$920 million should still close in 2020.
