Boeing’s chief said on Monday that it could take three to five years to restore the dividend as the company recovers air travel at a slower pace in the wake of the coronovirus crisis.
Chief Executive David Calhon’s remarks were an indication that paying down debt and maintaining Boeing’s construction supply chain were bigger priorities than shareholder payments for the future.
Speaking at the company’s annual meeting, Calhoun offered a sober view on the near-future prospects for commercial air travel in the wake of the virus, which is estimated to cost an estimated $ 314 billion in 2020 revenue, potentially some hurdles. Is removing
“Based on what we know right now, we expect the journey to take two to three years to return to 2019 levels and an additional few years to grow the long-term trend of the industry,” Kalhoun said.
Boeing announced plans to launch a voluntary worker layoff earlier this month. Sources have told AFP that the company hopes to cut its commercial airline workforce by 10 percent.
Even before the breakdown of COVID-19, Boeing was already under pressure when two crashes of its 737 Max killed 346 people, leading to its global grounding from March 2019.
About $ 17 billion was aimed at Boeing as part of a massive federal relief bill approved at the end of March under the CARES Act, which prohibits dividends and share buybacks from companies seeking assistance. Boeing has not said definitively whether it will seek federal aid.
According to attorneys representing the lawsuits against Bose, the families of the victims of Max Crash have applied to US Treasury Secretary Steven Menuchin to block funding for Boeing.
The annual meeting was held remotely in view of socially distancing policies and also included brief remarks from shareholders, who put forward proposals for the reign of officials after the Max disasters.
Proxy advisor Institutional Shareholder Services had recommended “no” votes on the four longtime Boeing directors in view of the problems, citing the failure of an adequate management strategy and corporate culture.
But shareholders opted to recast the entire slate, although the two directors received only 60 percent of the vote, according to the Boeing securities filing.
Investors with a 52% majority voted to make the chairman an independent member of the board.
Boeing, which has split the roles of CEO and chairman as it resolves its current crisis, had opposed the measure.
Calhoun defended the company’s withdrawal from a $ 4.2 billion deal with Brazilian company Embraer, which said Boeing would be sued after the move.
Calhoun predicted a strong recovery of the airline industry when the COVID-19 crisis was involved, but warned of a difficult road ahead.
Coronovirus will force airlines to rethink how to manage flights, which places greater emphasis on cleanliness.
During a question and answer session with investors, Calhoun was asked whether Boeing expected the planes to be reassembled to meet the social distortion guidelines.
“This is an education for all of us, without any doubt, our customers are going to form a new relationship with the flying public,” said Kalhoun. ”
Airline customers are postponing delivery, suspending payments to retire Boeing and older aircraft, which affects the company’s services business.
All of those effects have been sustained for over a year of revenue tied to the 737 MAX.
“We know that we will have to borrow money over the next six months,” Calhoun said, adding that the debt-paying company will take over the company in the immediate future, disrupting the ability to return cash to shareholders.
He identified maintaining the company’s supply chain as a priority, saying “without the supply chain, there would be nothing to collect.”
The company also announced on Monday that it would resume manufacturing of the widebody 787 plane at the South Carolina plant earlier this week, including new procedures implemented to increase COVID-19, including cleaning, voluntary temperatures. Screening and physical distancing policy are included.
Boeing shares fell 0.3 percent to $ 128.63.