Boeing Executives Restricted from Flying Business Class to Cut Costs Amid Strike

Boeing is taking drastic measures to reduce expenses as thousands of its workers are on strike, including eliminating first and business-class travel for its executives. The company is also implementing a hiring freeze and considering potential furloughs in response to the ongoing strike.

Cost-Cutting Measures

In a memo to employees penned by Boeing CFO Brian West, the company outlined several actions aimed at preserving cash during the strike. These actions include the elimination of first and business-class travel for all workers, including executives. Additionally, Boeing is freezing hiring and contemplating furloughs for some employees.

Strike Impact

Over 30,000 Boeing workers in the US rejected a new pay offer and opted to strike, prompting the company to take these cost-saving measures. The planemaker is also pausing pay increases for managers and executives and requesting suppliers to temporarily stop shipments of parts for certain aircraft.

Financial Ramifications

Previous strikes have significantly impacted Boeing's financial performance, resulting in substantial losses and delayed plane deliveries. An analysis from investment bank TD Cowen projected that a strike similar in duration to Boeing's 2008 walkout could cost the company up to $3 billion.

Uncertainty Surrounding Restrictions

It remains unclear whether Boeing's restrictions on executive travel extend to the use of private jets. Reports suggest that Boeing's corporate planes logged approximately 4,500 flight hours last year, incurring a fuel cost of around $14 million.

Ongoing Challenges

The strike adds to Boeing's existing challenges, including safety concerns and a federal investigation following a midair incident involving an Alaska Airlines 737 Max 9 door plug malfunction in January. Boeing referenced West's statements but declined to provide further comments on the matter.

—————————————————————————————————————————————
By: tcarter@businessinsider.com (Tom Carter)
Title: Boeing Executives Restricted from Flying Business Class to Cut Costs Amid Strike
Sourced From: www.businessinsider.com/boeing-executives-barred-from-business-class-travel-cost-cutting-strikes-2024-9
Published Date: Tue, 17 Sep 2024 09:33:50 +0000