"Based on what we know now, we expect it will take two to three years for travel to return to 2019 levels and an additional few years beyond that for the industry's long-term trend growth to return," Calhoun said.
Even before Covid-19 broke out, Boeing
was already under pressure after two crashes of its 737 MAX killed 346 people, leading to a global grounding since March 2019.
is expected to soon initiate talks with the US Treasury on potential federal support for the aviation giant. The company will need to borrow more money over the next six months and does not expect to pay dividends again for years, as it wrestles with industry fallout from coronavirus and the grounding of its 737 MAX jet, chief executive Dave Calhoun told shareholders on Monday.
Around $17 billion aimed at Boeing
was included in the giant federal relief bill approved in late March under the CARES act, which restricts dividends and share buybacks from companies
that take aid.
Families of the MAX crashes' victims have petitioned US Treasury Secretary Steven Mnuchin to withhold funding for Boeing unless it meets stringent safety and governance standards, according to lawyers who are representing the victims in suits against Boeing.
The annual meeting was held remotely in light of the social distancing policies and included brief remarks from shareholders who put forth proposals to reign in executives after the MAX disasters.
Proxy advisor Institutional Shareholder Services had recommended "no" votes on four longtime Boeing directors in the wake of the problems, citing a failure to adequately oversee management strategy and corporate culture. But all Boeing directors were re-elected by shareholders. A narrow 52 per cent majority of investors did vote against making the chairman an independent member of the board.
Boeing has divided the roles of CEO and chairman as it navigates its current crisis.
Calhoun defended the company's withdrawal from a USD 4.2 billion deal with Brazilian company Embraer, which has said it will sue Boeing following the move. Calhoun predicted the airline industry would have a strong recovery once the Covid-19 crisis is contained, but warned of a tough road ahead.
The coronavirus will compel airlines to reconsider the way they manage flights, putting greater emphasis on hygiene.
During a question and answer session with investors, Calhoun was asked whether Boeing expects planes to be reconfigured to meet social distancing guidelines.
"Our customers without a doubt are going to have to create a new relationship with the flying public," Calhoun said, adding that "for all of us, it's going to be an education." Airline clients are deferring deliveries, suspending payments to Boeing and retiring older aircraft, which hits the company's services business.
All those effects are on top of more than a year of lost revenues tied to the 737 MAX.
"We know we're going to have to borrow money in the next six months," Calhoun said, adding that repaying debt will occupy the company for the next while, impeding its ability to return cash to shareholders.
He also identified maintaining the company's supply chain as a priority, saying "without the supply chain, there will be nothing to assemble." Shares of Boeing fell 0.6 per cent to $128.20 shorty after midday.