Boeing CEO Kelly Ortberg grounded much of the company’s corporate fleet used for travel by its 19-member executive council in mid-September, according to a recent Bloomberg report.
The report stated that executives were told to fly economy on scheduled airline flights instead of the Challenger 650s and VIP-configured 737s. This cost-cutting move came in the wake of September’s machinist union strikes at manufacturing plants in the Pacific Northwest.
Machinists with the International Association of Machinists and Aerospace Workers (IAM) accepted a new contract with Boeing securing a 38% pay increase over the next four years among other benefits after their 53-day strike. These strikes cost Boeing over $6 billion, according to the company’s third-quarter report for the year, and Boeing delivered just 14 commercial jets in the month of October.
Aviation consultant Brian Foley told Bloomberg that the savings from Boeing flying its executives – estimated to be $15 million per year – wouldn’t help with much of Boeing’s $58 billion debt load.
Bloomberg reported that Boeing’s executive fleet operated at an 85% decrease from last year with just 29 flights in October, down 56 from September and 146 in August.
In addition to trimming back on executive flights, Boeing also announced in October that it would lay off 17,000 workers – roughly 10% of its workforce – by early next year. Over 400 of these employees were engineers and technical workers in the Society of Professional Engineering Employees in Aerospace (SPEEA) union.
AirlineGeeks reached out to Boeing for comment.
