Boeing wrestles with coronavirus fallout, says will need to borrow more money
Story highlights
Boeing is trying to bring its 737 MAX jet back into service after two fatal crashes, even as the aviation industry slumps because of the coronavirus, which has dried up demand for passenger air travel.
Boeing Co said it would need to borrow more money over the next six months and that it did not expect to pay dividends again for years, as it wrestles with the coronavirus lockdown-induced economic fallout.
Boeing is trying to bring its 737 MAX jet back into service after two fatal crashes, even as the aviation industry slumps because of the coronavirus, which has dried up demand for passenger air travel.
The grounding of its 737 MAX jet has caused the US planemaker major losses.
Boeing would continue ordering parts and services from its suppliers to ensure the smaller companies have enough business to keep them afloat during the downturn.
Boeing expects it will take two to three years for travel to return to 2019 levels and an additional few years more for the industry's long-term trend growth to return. It, however, will resume paying dividends in the medium-term.
The largest US planemaker, which reports first-quarter earnings Wednesday, last month drew down its entire $13.8 billion credit line and suspended its dividend. Boeing's first- quarter deliveries were a third of the 149 seen a year earlier and the lowest since 1984 for the first quarter.
Boeing shares closed down 0.3 per cent to $128.68.
Boeing also said on Monday it would resume 787 production in South Carolina next week after it resumed commercial airplane production last week in Washington state. Each of the company’s 12 board nominees received a majority of votes from shareholders, though five directors got a significant number of no votes.
Two proxy advisors, Glass Lewis and Institutional Shareholder Services (ISS), had recommended that Boeing shareholders vote against key board members to show objections to the company’s handling of the 737 MAX crisis.