Boeing CEO says air travel will take years to recover

Ahead of the company's first-quarter results, Calhoun foresees a smaller commercial market after the coronavirus disruption


Dave Calhoun, the CEO of 0'>Boeing (BA), has told shareholders that demand for air travel will not recover to 2019 levels for two to three years. Airlines and aircraft manufacturers have been among the sectors worst affected by the Covid-19 pandemic.

In the US alone passenger demand has fallen by more than 95 per cent compared with a year ago. Airlines around the world are set to lose around $314bn (£251bn, €288bn) this year, according to the International Air Transport Association.

Calhoun, who has only been in the job since January, described this crisis as “unlike anything we have ever experienced”. He said that airlines are "grounding fleets, deferring airplane orders, postponing acceptance of completed orders, and slowing down or stopping payments".

The CEO and president of America’s largest aircraft manufacturer added: "We are in an unpredictable and fast-changing environment, and it is difficult to estimate when the situation will stabilise. When it does, the commercial market will be smaller and our customers' needs will be different."

Boeing’s share price has plunged over 60 per cent in 2020. Even before the coronavirus outbreak the company was already in turmoil, with its entire 737 MAX fleet grounded due to safety concerns.

0'>Airbus, the US firm’s largest competitor has also seen its share price fall by more than 60 per cent in the year-to-date and has cut production by a third to reduce costs.

Having already drawn down the full $13.8bn revolving credit at its disposal, Boeing is still struggling to survive. Already it has walked away from a proposed $4.2bn deal with Brazilian aircraft manufacturer Embraer. It has offered employees buyouts and voluntary leave to reduce payroll costs.

The pandemic’s impact on Boeing will become yet clearer on Wednesday, April 29, when the company reports its first quarter results.

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