Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Boeing Projects Layoffs, Scrambles to Stay Afloat

SEATTLE -- Even as executives at Boeing Co.'s commercial airplanes division was preparing to lay off as many as 30,000 people, the United States' leading airplane maker was aggressively working this week to revitalize the airline industry -- as well as get itself back on track.

Boeing's plan is partly about hard and fast solutions such as redesigning airplanes to prevent hijackings and helping airlines get federal aid.

But perhaps the most important tactic for revitalizing the company is much more subtle: Boeing has to assure frightened travelers that flying is safe.

"The best thing we can all do is go take an airplane trip," Alan Mulally, president and chief executive of Boeing's commercial airlines division, told reporters a week after four Boeing jets were hijacked and used in a deadly terrorist attack.

It was one of several public appearances in which an upbeat Mulally touted the safety of airplane travel while acknowledging that many people are shocked and scared.

"I've been designing airplanes for 31 years, and it's been my dream and I've lived my dream," he said. "And I've never in my wildest dreams believed [an airplane] could be used as a weapon."

So far, however, few seem to be heeding his call to the airports. In a speech to the Greater Seattle Chamber of Commerce a day later, Mulally said most major airlines were flying less than 80 percent of their total schedules -- and even so, most of those airplanes are only about 30 percent full.

The already struggling airline industry is now in a crisis. Companies have announced plans to lay off tens of thousands of workers, predicted billions of dollars in losses and prompted one of Boeing's biggest layoff announcements.

The aerospace industry has dealt with a fear-based crisis before. During the Gulf War, a fear of traveling led to dramatically reduced demand for about 15 months.

In response, Boeing partnered with airlines and travel associations to launch a formal campaign about the safety of air travel, spokeswoman Susan Bradley said.

Bradley said the company may work with others in the industry for another such campaign, although it's too early to know what form such plans may take.

Right now, Mulally and others are on a more informal mission, using anecdotes and even jokes to make people feel more comfortable.

"There's a great appetite for reassurance," Bradley said.

Boeing is also quick to say efforts already are under way to make airplanes safer from hijacking attacks.

Earlier this week, Boeing vice president Hank Queen told U.S. Congress members that proposals on altering airplanes have ranged from installing bulletproof doors between the cockpit and cabin to better security equipment that communicates with air traffic control.

But he and Mulally warned there are no easy, quick solutions. For engineering and practical reasons, the cockpit door cannot be completely sealed, he said, and pilots cannot be left to fend off hijackers alone.

Also in Washington, Boeing is helping the airlines' effort to get federal financial aid to survive the crisis. Spokesman Tim Neale characterized the efforts as informal.

"We're really out there just reinforcing the message to members of Congress that the crisis for airlines is very real," Neale said.

Boeing chairman Phil Condit sent a letter to President George W. Bush in support of the airlines, he said.

The company has chosen to support the airlines' bid for aid -- rather than seek aid itself -- in part because Boeing is not facing such dire financial problems, Neale said.

Mulally said the company believes airlines must be healthy for Boeing to survive.

Some analysts contend Boeing's plan for revitalization is even more subtle: It lies in the layoff announcement itself.

Richard Aboulafia, an aviation analyst with the Teal Group, said he didn't believe Boeing would lay off 30,000 workers -- and he still doesn't believe it now.

"It's to their advantage to announce a worst-case scenario," he said. "One, you send a positive signal to Wall Street that you're concerned about profitability. Two, you send a signal to workers and their unions that they're no longer in the driver's seat. ... And three, you send a signal to government that you need help."

Aboulafia does not dispute that the aviation industry is in a grim position now and that Boeing will take a blow from the airlines' woes.

But he questions whether Boeing will really have to reduce its commercial division staff by between 20 percent and 30 percent, as the company has predicted.

"There is a need to move to a defensive position here," he said.