Boeing's chief executive said on Monday that the restoration of the dividend could take three to five years, as the company adjusts to a slow recovery in air traffic after the corona virus crisis.
Chief Executive David Calhoun's comment was a signal that repaying debt and maintaining Boeing's manufacturing chain for manufacturing for the foreseeable future were higher priorities than paying out shareholders.
At the company's annual meeting, Calhoun gave a sober outlook on the short-term outlook for commercial aviation after the virus, which is expected to cost the aviation industry $ 314 billion in 2020 and potentially affect some airlines.
"Based on what we now know, we expect it will take two to three years for travel to return to 2019 levels and a few more years for the long-term trend growth in the industry to return," said Calhoun.
Boeing announced the beginning of this month to carry out a plan for voluntary dismissal of workers. Sources have indicated that the company expects to reduce 10 percent of its workforce in commercial airlines AFP.
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 founding since March 2019.
Around $ 17 billion for Boeing was included in the huge federal aid law passed in late March under the CARES law, which restricts dividends and share buybacks from companies that seek help. Boeing has not definitely said whether it will take federal aid.
Families of victims of the MAX accident have asked Treasury Secretary Steven Mnuchin to hold back Boeing funding unless it meets stringent security and governance standards, lawyers representing victims in Boeing lawsuits.
The annual meeting was held in light of the policy of social distancing from afar instead and included brief remarks by shareholders, submitted the proposals to govern in accordance with the MAX disasters in leadership positions.
The proxy consultant Institutional Shareholder Services recommended four long-standing Boeing directors to vote against the problem because the management strategy and corporate culture were not adequately monitored.
However, the shareholders opted to re-elect the entire list, although two directors received only about 60 percent of the vote, according to a Boeing securities filing.
A narrow 52 percent majority of investors voted for the chairman to be an independent member of the board.
Boeing, which the roles of CEO and chairman has split in addressing the current crisis, had spoken out against the measure.
Calhoun defended the withdrawal of the company from a 4.2-billion-dollar deal with Brazilian company Embraer, which has announced plans to sue Boeing after the move.
Calhoun forecast a strong recovery in the aviation industry, once the COVID-19 crisis is contained, but warned of a difficult road.
The corona virus will force airlines to rethink the way they manage flights while paying more attention to hygiene.
During a question-and-answer session with investors was asked Calhoun whether Boeing expects planes to be reconfigured to meet the guidelines for social distancing to match.
"Our customers will no doubt have to build a new relationship with the flying public," Calhoun said, adding, "for all of us it will be an education."
Airline customers postpone deliveries, suspend payments to Boeing, and issue older aircraft, which affects the company's service business.
All of these effects add up to more than a year of revenue loss tied to the 737 MAX.
"We know that we need to borrow in the next six months money," Calhoun said, adding that the repayment of debt deal with the company in the near future and will affect its ability to return cash to shareholders.
He also identified the maintenance of the supply chain of the company as a priority and said: "Without the supply chain, there is nothing to install."
The company also announced Monday that it will begin manufacturing the 787 wide-body aircraft at its South Carolina facility later this week. New techniques to combat COVID-19 have been introduced, including improved cleaning, voluntary temperature testing, and guidelines for physical removal.
Boeing shares fell 0.3 percent to $ 128.63
(Except for the headline, this story was not edited by NDTV staff and published from a syndicated feed.)