Boeing chief says it will take 3-5 years to restore company's dividend after pandemic ends

With airlines around the world grounded due to border control measures put in place to contain coronavirus, Boeing’s chief executive said that the air traffic may not bounce back for two or three years to the pre-pandemic levels. Speaking at an annual meeting, Boeing CEO David Calhoun presented a sober outlook of the aviation industry and predicted that it could take three to five years to restore the company’s dividend.

The airline industry has been hit hard by the pandemic and Boeing, which was already under pressure with two aircraft crashes, has reportedly decided to cut on its workforce of civil aviation unit by 10 per cent. The aerospace company assembles most of its civilian aircraft in Washington state, where more than 70,000 workers work, and the layoff could affect around 7,000 employees.

Calhoun said that it is difficult to estimate when the situation will stabilise due to the unpredictable and fast-changing environment owing to the coronavirus crisis. He added that the commercial market will be smaller after the resumption of airline service and customers’ needs will be different.

Read: Boeing Plans To Reduce Workforce In Civil Aviation Unit: Report

Letter to employees

Recently, the company chief wrote a letter to Boeing employees regarding US government support for airlines and the aerospace industry. Calling it a step on the long road to recovery, Calhoun said that the US government and 10 airlines agreed on a $25 billion package of support.

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Boeing CEO highlighted the importance of the support package saying the relief provided by the government is vital to maintaining the aviation pillar of the US economy, even if full recovery will take years, not months. Calhoun added that the airlines have been witnessing an unprecedented crisis and the global airline revenues are set to drop by a total of $314 billion by the end of the year.

“Our industry will need the government’s support, which will be critical to ensuring access to credit markets and likely take the form of loans versus outright grants,” wrote Calhoun in the letter published on Boeing’s website.

Read: Boeing Reveals Voluntary Layoff Plan For Employees Amid Coronavirus Crisis

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(Image credit: AP)