Boeing (BA -2.69%) said Wednesday it intends to cut production of its once hot-selling 787 Dreamliner and other twin aisle planes, responding to a dramatic decline in travel demand due to the COVID-19 pandemic.

Boeing will reduce 787 production to a rate of 10 per month in 2020, from 14, and is forecasting seven per month by 2022, while also reducing production on its 777 line to three per month by 2021. The 737 MAX is currently grounded, but assuming it is cleared to resume flying in the second half of 2020, Boeing intends to resume production at a low rate in 2020 and gradually increase to 31 planes per month in 2021.

Prior to its 2019 grounding, Boeing had envisioned a 737 MAX production rate as high as 57 planes per month.

Boeing's widebody fleet on display in an artist rendering.

Image source: Boeing.

"The pandemic is also delivering a body blow to our business — affecting airline customer demand, production continuity and supply chain stability," CEO Dave Calhoun said in a letter to employees. "The demand for commercial airline travel has fallen off a cliff, with U.S. passenger volumes down more than 95% compared to last year."

Calhoun's comments came on the same day that Boeing reported a first quarter loss of $1.70 per share on revenue of $16.9 billion, falling short of consensus expectations for a $1.61 per share loss on revenue of $17.3 billion. Boeing said its total backlog at the end of the quarter stood at $439 billion, including over 5,000 commercial plane orders, but some of those orders could be at risk if air traffic takes years to recover.

Boeing said it is seeking to reduce its total workforce by about 10% through a combination of voluntary layoffs, natural turnover, and "involuntary layoffs as necessary." The cuts will be deeper in areas heavily exposed to the commercial operations, and Calhoun said he hopes to lean on Boeing's $25 billion defense and space units to help cushion the impact of a commercial slide.

"The ongoing stability of our defense, space and related services businesses will help us limit the overall depth of the cut," Calhoun said. "And in the end, because there are so many unpredictable drivers for this crisis, we'll have to monitor continuously what's happening in our markets, and we will make adjustments whenever needed to ensure we're matching the size of our business to the changing demand in the market."