What happened

Air travel is collapsing in the face of the COVID-19 coronavirus, and the U.S. economy is staring down the barrel of a new Great Recession.

Nowhere is this being felt more painfully than in the airplane industry. Already, Delta has cut its flight schedule by 40% and United Airlines by 50%. American Airlines cut international flights by 75%. Fewer flights logically implies fewer planes that need to be bought, and airplane manufacturers are feeling the pinch.  

Today, shares of Boeing (NYSE:BA) were down 2.7% as of 1:20 p.m. EDT after falling more than 11% initially. Textron (NYSE:TXT), maker of Cessna prop-driven planes, is down 10.2%. Even defense giant Lockheed Martin (NYSE:LMT), which primarily manufactures airplanes for the military (but has a small civilian division, too), is off 4.9%.

And General Electric (NYSE:GE), which makes airplane engines for all three of these manufacturers, is still down about 0.5% after dropping nearly 7% earlier in the day.

Collage of an airplane, coronaviruses, and a world map

Image source: Getty Images.

So what

Broad trends can affect a broad swath of stocks, but some of the airplane stocks moving lower today may have more specific concerns. In the case of Boeing, for example, The Wall Street Journal reported today that declining demand for airplanes could force Boeing to lay off workers at its jetliner factories. The company is reportedly also considering cutting its dividend to conserve cash.  

In contrast, General Electric -- whose stock is holding up best of the four aerospace companies named above, despite its role supplying engines to the other three -- had some positive news to report today.

GE has "increased our manufacturing capacity and output of equipment -- including CTs, ultrasound devices, mobile X-ray systems, patient monitors, and ventilators -- important in the diagnosis and treatment of COVID-19 patients."

In addition, citing unprecedented demand for medical equipment, including ventilators, the company says it is "adding manufacturing lines to ventilator production and increasing the number of shifts to produce around the clock," and to support this effort, "hiring additional manufacturing employees and shifting current employees to support increased demand immediately."

Now what

In a time when many investors are worrying about decreases in product demand, GE's statement that it is ramping production to meet increased demand is naturally helping to support its stock. Granted, at just $19.9 billion in annual sales (according to data from S&P Global Market Intelligence), GE's healthcare division is only about 60% the size of its much more important aviation division. But GE is proving the value of being a conglomerate here, using strength in one division to offset weakness in another.

Whether the airplane makers GE sells to can manage a similar trick remains to be seen.