In a virtual shareholders’ meeting on Monday this week, Boeing CEO David Calhoun warned that the world’s second-largest planemaker will need to raise further cash over the next six months and will be unlikely to pay any shareholder dividends for many years to come. “That process could take three to five years… It’s going to be a while before dividends come back,” Calhoun said.
The aerospace giant is suffering, financially, from the dual problems of the effects of the COVID-19 pandemic on the industry and ongoing problems which has seen its 737 MAX jet remain grounded for over 13 months. “We know we’re going to have to borrow more money in the next six months in order to get through this really difficult moment, to provide the right liquidity to the supply chain that represents our industry,” Calhoun said during the company’s virtual annual general meeting, adding that: “Our first priority is going to be to pay that back, the principle and the interest that goes with it.”
Boeing’s intention is to maintain the current supply chain by ordering parts and services from smaller companies to ensure their continued survival. Boeing will report first-quarter earnings Wednesday, April 29, while last month it drew down its entire US$13.8 billion credit line and suspended its dividend. Boeing’s first- quarter deliveries were down one third compared to the same period last year. The anticipated return to service of the 737 MAX by mid-year no longer seems to be feasible with a key certification flight test unlikely to take place before the end of May, though Calhoun was keen to point out the company’s continued confidence in the MAX.
