NEW YORK(AFP) – Boeing's head said that restoring the dividend could take three to five years as the company girds for a slow air travel recovery in the wake of the coronavirus crisis.
The comment from Chief Executive David Calhoun was a signal that paying back debt and keeping up Boeing's manufacturing supply chain were bigger priorities than shareholder payouts for the forseeable future.
Speaking at the company's annual meeting, Calhoun offered a sober outlook on the near-term prospects for commercial air travel in the wake of the virus that is projected to cost the airline industry an estimated $314 billion in 2020 revenues, potentially felling some carriers.
''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,'' Calhoun said.
Boeing announced earlier this month it would undertake a voluntary worker layoff plan. Sources have told AFP the company expects to cut 10 percent of its commercial airline workforce.
Even before COVID-19 broke out, Boeing was already under pressure after two crashes of its 737 MAX killed 346 people, leading to its global grounding since March 2019.
Around $17 billion aimed at Boeing was included in the giant federal relief bill approved in late March under the CARES act, which restricts dividends and share buybacks from companies that take aid. Boeing has not said definitively whether it will take federal aid.
Families of the MAX crashes' victims have petitioned US Treasury Secretary Steven Mnuchin to withhold funding for Boeing unless it meets stringent safety and governance standards, according to lawyers who are representing the victims in suits against Boeing.