© EPA-EFE/Arhiva
"The health crisis is unlike anything we have ever experienced," Mr. Calhoun said at the annual meeting. "It will be years before this returns to pre-pandemic levels."
Mr. Calhoun laid out the coronavirus pandemic's toll on the industry: Global airline revenues are set to drop by $314 billion this year. In the U.S., more than 2,800 planes are idled. Passenger demand is down 95% from last year.
"We are in an unpredictable and fast-changing environment, and it is difficult to estimate when the situation will stabilize," he added. "But when it does, the commercial market will be smaller and our customers' needs will be different."
© Christopher Goodney/Bloomberg NewsBoeing CEO David Calhoun
Mr. Calhoun offered few specifics about production cuts or planned job cuts, leaving more details for Wednesday, when Boeing reports first-quarter results. Boeing has been weighing production cuts and layoffs and has recently been considering a plan to cut its workforce by about 10%.
To save cash, Boeing has suspended its dividend, and Mr. Calhoun said Monday that it wouldn't resume paying one for some years. The plane maker will need to borrow again this year, and it will need to repay that debt over the next three to five years, he said.
© Jason Redmond/ReutersBoeing has been in talks with the U.S. government over potentially billions of dollars in taxpayer help as it faces the aviation industry’s bleak outlook.
Mr. Calhoun's remarks echoed those of Guillaume Faury, CEO of Airbus SE, who said the European plane maker was bleeding cash and needed to cut costs and jobs.
"The survival of Airbus is in question if we don't act now," Mr. Faury said in a letter to employees last week.
Airbus on Monday said it would furlough 3,200 employees at its wing manufacturing plant in the U.K. Furloughed workers would be placed on the U.K.'s job retention scheme, which uses public funds to cover up to 80% of employees' salaries. Airbus said it would then top that up to as much as 90% of regular pay depending on salary level. Employees will be furloughed for at least three weeks, with starting dates staggered through May 15. Only the company's factory in Broughton, Wales, is affected. That is where Airbus makes wings for its range of commercial aircraft.
Boeing has been in talks with the U.S. government over potentially billions of dollars in taxpayer help as it faces the aviation industry's increasingly bleak outlook.
With demand plummeting for new aircraft during the pandemic, Boeing last weekend walked away from a $4 billion deal for Brazilian regional jet maker Embraer SA's commercial arm. Embraer said Monday it has started arbitration over the failed deal.
Boeing said Monday it would resume production at its North Charleston, S.C., factory where it builds 787 Dreamliners. The factory has been halted since April 8 due to the virus outbreak. The resumption of operations, scheduled to begin Sunday, follows factory restarts in the Seattle area.
Mr. Calhoun said the pandemic is spurring reflection on how the plane maker will design airplane cabins in the future, including how air circulates. "There's going to be a lot of learning in this process," he said.
Despite the outlook, Mr. Calhoun expressed longer-term optimism for Boeing, the aviation industry and future of travel. "People will still want to fly, and they will fly," he said. "I believe we will return to a robust market. It's a question of how long it takes."
Boeing's board nominees won a majority of votes in shareholders' election, despite two influential proxy advisory firms' recommending votes against some key directors because of their role in the 737 MAX crisis.
All five Boeing board nominees that survived recommendations from proxy advisers against renomination faced substantial opposition. Susan Schwab and Arthur Collins secured backing from less than 60% of votes cast at Boeing's annual meeting, with chairman Larry Kellner, Edmund Giambastiani, and Ronald Williams supported by 65% to 75% of voters.
Boeing shares fell 30 cents Monday to $128.68, while Airbus shares dropped 2.4% to €51.07 in European trading. Both stocks are down nearly 61% in 2020.
Reader Comments
If we could stop people flying around the world because they can, and limited aviation to cargo planes, that would definitely improve our air quality. Four huge Pratt & Whitney's firing up just on tick-over must push out more pollution in 10 mins. than 1000 cars do in a week.
The lockdown, although negative has given all of us a break from the madness that is modern life to reflect on ways that things could be improved.
It'll probably never happen but the idea for a different world is there. (((Other))) people are planning a very different new world however...