The ongoing issues at Boeing along with production delays at Airbus are expected to result in layoffs at Senior, a prominent UK engineering group.

Senior, listed on the FTSE 250, is experiencing difficulties primarily due to its role as a critical supplier to the world’s leading aircraft manufacturers, Boeing and Airbus, both of which are currently facing operational hurdles.

The company’s stock fell over 12% following a warning about decreased demand for its engine parts, fuel ducts, valves, and other machined components used in aircraft construction. Senior’s shares closed at 128p on Tuesday, marking a near two-year low.

Three years prior, Senior declined a takeover bid from US private equity firm Lone Star, which valued shares at 200p. This figure is significantly lower than the pre-crash value of over 300p per share for Senior, prior to the fatal Boeing 737 Max incidents six years ago.

In a trading report issued after the close of its third financial quarter, Senior informed stakeholders: “In the near-term, the commercial aerospace manufacturing sector is facing significant temporary challenges as widely reported.”

Senior noted that Boeing’s production of the 737 Max has been limited this year due to oversight from the Federal Aviation Administration, triggered by the Alaskan Airlines incident earlier in 2024, when an emergency exit door malfunctioned during flight.

The company had previously anticipated improvement given Boeing’s commitment to ramp up production of the 737 Max to 38 units per month by year-end.

However, the ongoing employee strike affecting Boeing’s commercial aircraft operations near Seattle has now lasted four weeks, negatively impacting Senior’s operations most closely tied to its customer, including those engaged in its supply chain.

Furthermore, Airbus has openly acknowledged facing supply chain difficulties, particularly with respect to engines and interiors. Other segments of its supply chain with which Senior has contracts have generally adhered to previously established production schedules.

As a result, Senior has been notified by one of its Airbus ‘tier 1’ suppliers about a significant reduction in the scheduled deliveries from Senior for the fourth quarter of this year, before normal operations are expected to resume in the second quarter of the following year.

The statement added: “While we are still determining the full impact on our businesses linked to these affected programmes, we have taken proactive measures to manage costs and maintain cash flow.”

These measures include adjusting the workforce size to better align with sales demands through both temporary furloughs and permanent layoffs, as well as reducing discretionary spending.

While the company did not specify the number of expected job losses, it is likely that the majority will affect employees in the US. Senior currently employs approximately 6,600 individuals across the US, UK, France, and Germany, with its commercial aerospace division contributing nearly half of its revenue.

Senior operates facilities in Congleton and Macclesfield in Cheshire that manufacture ducts and valves for fuel systems. It also has a thermal engineering facility located in Royston, Hertfordshire, and a factory in Earby in the Pennines that produces machined components.

The company also indicated that its civil aerospace division would not achieve the £16 million in profits realized in the first half of the year during the latter half, compared to £27 million in profit during the previous year.