New Delhi: US aerospace major Boeing has warned that air travel will take years to to return to pre-pandemic levels. And even when the situation stabilises, the market for commercial aircraft will be smaller with airlines’ needs hanging drastically. The Boeing Company CEO David Calhoun’s address at this year’s annual meet of shareholders make it clear that it is “preparing for the new reality.”
“The health (corona) crisis is unlike anything we have ever experienced. With fewer people taking to the skies, global airline revenues are set to drop by $314 billion by the end of the year. In the US alone, more than 2,800 airplanes have been idled, and passenger volume is down over 95% compared to the prior year. It will be years before this returns to pre-pandemic levels,” Calhoun, 63, who became Boeing president and CEO in January 2020, said in his address delivered virtually in the US.
“And this has a direct effect on the products and services our customers will want and will need. Airlines are cutting back operations dramatically. As they assess their businesses, they are making difficult decisions that result in grounding fleets, deferring airplane orders, postponing acceptance of completed orders, and slowing down or stopping payments. They are also accelerating aircraft retirements and requiring fewer services. All of this adds pressure on our supply chain beyond what it is already experiencing because of the pandemic,” he said.
“We are in an unpredictable and fast-changing environment, and it is difficult to estimate when the situation will stabilise. But when it does, the commercial market will be smaller, and our customers’ needs will be different. We will need to balance the supply and demand accordingly as the industry recovers. But I remain confident in our industry and in Boeing — we will recover. We are already preparing for the new reality,” the CEO said.
“Currently, our team is focused on the best ways to keep liquidity flowing through our industry and to our supply chain until our customers are buying airplanes and related services again. Specifically, we have drawn down on a loan, reduced operating costs, suspended dividend payments, extended our existing pause on stock buybacks, de-prioritised some strategic investments, and accelerated some progress payment receipts with the help of our defence customers. Larry and I also are forgoing all pay until the end of the year,” he said.
“The recent $25 billion support package agreed to by the airlines and the (US) government is a pivotal step toward maintaining the aviation pillar of the United States economy, even if full recovery will take years, not just months. Knowing that the US airline industry has critical financial support through the pandemic allows us to plan our production and services systems for the medium- and long-term impact on air travel,” the CEO said.
27/04/20 Saurabh Sinha/Times of India
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“The health (corona) crisis is unlike anything we have ever experienced. With fewer people taking to the skies, global airline revenues are set to drop by $314 billion by the end of the year. In the US alone, more than 2,800 airplanes have been idled, and passenger volume is down over 95% compared to the prior year. It will be years before this returns to pre-pandemic levels,” Calhoun, 63, who became Boeing president and CEO in January 2020, said in his address delivered virtually in the US.
“And this has a direct effect on the products and services our customers will want and will need. Airlines are cutting back operations dramatically. As they assess their businesses, they are making difficult decisions that result in grounding fleets, deferring airplane orders, postponing acceptance of completed orders, and slowing down or stopping payments. They are also accelerating aircraft retirements and requiring fewer services. All of this adds pressure on our supply chain beyond what it is already experiencing because of the pandemic,” he said.
“We are in an unpredictable and fast-changing environment, and it is difficult to estimate when the situation will stabilise. But when it does, the commercial market will be smaller, and our customers’ needs will be different. We will need to balance the supply and demand accordingly as the industry recovers. But I remain confident in our industry and in Boeing — we will recover. We are already preparing for the new reality,” the CEO said.
“Currently, our team is focused on the best ways to keep liquidity flowing through our industry and to our supply chain until our customers are buying airplanes and related services again. Specifically, we have drawn down on a loan, reduced operating costs, suspended dividend payments, extended our existing pause on stock buybacks, de-prioritised some strategic investments, and accelerated some progress payment receipts with the help of our defence customers. Larry and I also are forgoing all pay until the end of the year,” he said.
“The recent $25 billion support package agreed to by the airlines and the (US) government is a pivotal step toward maintaining the aviation pillar of the United States economy, even if full recovery will take years, not just months. Knowing that the US airline industry has critical financial support through the pandemic allows us to plan our production and services systems for the medium- and long-term impact on air travel,” the CEO said.
27/04/20 Saurabh Sinha/Times of India
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