With the devastating impact the coronavirus outbreak is having on the aerospace industry, Boeing, the world’s second-largest planemaker, has thrown its weight behind the governments financial support for the aerospace sector to the tune of US$60 billion.
The financial lifeline may prove especially beneficial to Boeing which has been struggling, financially, since the grounding of the 737 MAX jet after two fatal crashes. “We appreciate the support of the president and the administration for the 2.5 million jobs and 17,000 suppliers that Boeing relies on to remain the number one U.S. exporter, and we look forward to working with the administration and Congress as they consider legislation and the appropriate policies,” the company said in a statement.
Boeing confirmed that it expects funding to be in the form of loan guarantees and will be used to prop up other hard-hit companies such as General Electric and Spirit Aerosystems who build engines and sections of jets, respectively, for Boeing. The company also acknowledged that the funding “will be used for payments to suppliers to maintain the health of the supply chain.”
On the other side of the coin, U.S. Airlines are seeking US$50 billion in aid to help see them through the crisis. The plight of airlines has severely impacted the likes of Boeing as, with the dramatic drop in demand and numerous ongoing international travel restrictions, many carriers are looking to postpone/defer the acquisition of previously ordered planes. The likes of Delta, United and American Airlines are parking up hundreds of planes as they look to dramatically reduce operating costs and limit capital expenditure.
While Boeing has made it clear it has no intention of changing its dividend or adjusting executives’ salaries, the CEOs of Southwest, JetBlue, Delta and United Airlines are all either taking pay cuts or forgoing their full salaries.
