Dive Brief:
- Spirit AeroSystems’s first quarter net revenue dropped 11% year over year to $1.5 billion, primarily due to lower production activity on most Boeing programs, according to a May 1 earnings release.
- The plane component manufacturer’s work on Boeing 737 aircraft was particularly impacted by the lower production levels — which is a major focus at its Wichita, Kansas, facility — due to increased costs and schedule changes implemented by the aircraft company, according to a securities filing.
- Following these developments, Spirit AeroSystems is furloughing between 250 and 350 employees for one month at its fuselage plant in Wichita, starting in mid-May, a spokesperson said in an email.
Dive Insight:
Spirit AeroSystems’ Q1 deliveries increased 40% YoY, up to 429 units, according to the fuselage supplier’s securities filing.
The deliveries include 48 business and regional jets, as well as 145 Boeing and 236 Airbus aircraft. Deliveries for the 737 rose 189% YoY as Boeing increased production levels after it implemented extra precautions in fuselage production at the Wichita facility last year.
The upcoming Wichita furloughs follow the company’s previous temporary layoff announcement in October 2024, which furloughed 700 workers for 21 days. The action was driven by Boeing’s 53-day workers' strike, which led to production disruptions.
Spirit AeroSystems’ quarterly net loss slightly improved to $613 million. The loss was partially alleviated by higher production activity on Boeing competitor Airbus’ aircraft, Spirit AeroSystems’ second largest customer.
The fuselage supplier has been raising the flag on its finances over the past year, as it reported a $2.14 billion net loss last year, primarily due to production and delivery changes implemented by Boeing. The alarm led to cash and credit advances from its two largest customers, Boeing and Airbus, in an effort to continue operations.
Spirit AeroSystems also finalized its $165 million sale of former subsidiary Fiber Materials Inc. to specialty textile manufacturer Tex-Tech in January.
Deliveries for Spirit AeroSystems’ two largest customers jumped 46% YoY
Still, Spirit AeroSystems has been assessing additional strategies that could improve funds and as of May 1, the company said it had developed a plan to improve liquidity, according to a recent securities filing.
The strategies include requesting additional funding from its customers, restructuring operations and layoffs or additional furloughs.
“We will need to obtain additional funding to sustain operations, as we expect to continue generating operating losses for the foreseeable future,” the company said in the earnings release.
Tariffs throw another wrench into Spirit AeroSystems’s money woes, which could affect its business, including its supply chain and customers, according to a Q1 securities filing. The fuselage manufacturer expects to see reduced profitability if the U.S. doesn’t reach agreements with countries such as China soon. Spirit AeroSystems did not disclose how much revenue it anticipates losing.
In the meantime, Spirit AeroSystems does have some money coming later this year. The company reached a $439 million agreement last week to sell some of its factory sites and production to Airbus. The sale is expected to close the deal concurrently with Boeing’s $4.7 billion acquisition of Spirit AeroSystems in Q3.
