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Wednesday, 23 January, 2002, 13:43 GMT
Boeing profits take $600m knock
Boeing planes in factory
Boeing, the world's number one aircraft manufacturer, has said the effects of the 11 September attacks have cut more than $600m from its profits.

The Chicago-based company said it earned $722m in the fourth quarter of last year but was taking a charge of $622m "primarily related to September 11 impacts on commercial airplanes".


Looking ahead, we are entering a challenging period, but with businesses that are performing well

Phil Condit, chief executive
The results announcement comes months after Boeing said it was cutting up to 30,000 jobs from its 95,000-strong commercial jet unit in light of the global aviation crisis.

Boeing shares were 2001's worst performer among New York's 30 Dow Jones industrials, losing 41% of their value.

'Worst changes coming'

"Looking ahead, we are entering a challenging period, but with businesses that are performing well," said chairman and chief executive Phil Condit.

"We believe our overall operating strength and balanced portfolio of businesses provide us [with] the opportunity to generate solid returns and cash."

Earlier on Wednesday, one aviation expert had warned there was worse to come for the US aviation industry.

"The worst changes are coming... Europe in that regard is way ahead of us with the Sabena/Swissair issues," Michael Boyd of Boyd Consulting told the BBC's World Business Report.

The Belgian and Swiss national airlines both filed for bankruptcy in late 2001.

Diversifying

Boeing, which derives about 60% of its revenues from sales of passenger aircraft, has been diversifying into other areas in order to protect itself from the cyclical commercial airline business.

It claims that moving headquarters to Chicago from Seattle has helped this process.

Boeing fourth-quarter sales were up 6.8% from the year-earlier period at $15.7bn.

It said it would deliver 380 passenger jets in 2002, down from 527 in 2001, and between 275 and 300 in 2003.

Of the 30,000 jobs to go, 12,000 have been eliminated so far with the remainder to go by mid-2002, Boeing said.

Airbus competition

The company, though still the global industry leader, faces increasing competition from Europe's Airbus consortium.

Airbus has cornered a substantial share of the commercial jet market with its new A380 super-jumbo, which remains years off going into commercial operation.

Airbus has cut 6,000 jobs and seen its order book diminish by a third.

See also:

23 Jan 02 | Business
Investors brace for Boeing results
23 Jan 02 | Business
Seattle: Boom days are over
17 Jan 02 | Wales
Airbus challenge to Boeing
19 Sep 01 | Business
Boeing: From biplanes to space craft
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