Boeing hosted the company’s virtual annual general meeting (AGM) on Monday this week.
While discussions of COVID-19, the 737 MAX crisis, and the aerospace downturn were largely postponed until the company announces its Q1 figures on Wednesday, chief executive David Calhoun made several remarks to shareholders about the future of aviation and potential staff layoffs.
“Based on what we know now, we expect it will take two to three years for travel to return to 2019 levels and an additional few years beyond that for the industry’s long-term trend growth to return,” he said.
“The health crisis is unlike anything we have ever experienced,” Calhoun said, before detailing the dramatic challenges the industry faces. Airlines are “grounding fleets, deferring airplane orders, postponing acceptance of completed orders, and slowing down or stopping payments”, he said. With passenger demand down over 95 per cent since early March, IATA figures predict that airlines are set to lose $314 billion this year alone.
To combat the crisis, Boeing has had to cut executive pay, scrap $4.6 billion in planned dividend payments, and borrow $13.8 billion (so far in 2020) from private creditors.
“Our first priority is going to be paying that back,” said Calhoun on Monday. “So that process could take three to five years. I don’t know. I don’t want to predict futures. But it’s going to be a long time before dividends come back as our number one priority.”
When the airline industry emerges from the COVID-19 crisis, Calhoun said that “the commercial market will be smaller, and our customers’ needs will be different”.
However, he made little reference to the termination of Boeing’s planned joint venture with Brazilian manufacturer Embraer or news on the timing of the return of the 737 MAX to service.