Air traffic: Boeing predicts 2 to 3 years for a return to normal because of the coronavirus

  •   29/04/2020 - 15h12
  •   DEHOUI Lionel

For quite some time now, travel has been banned in the countries most prone to the spread of the coronavirus. All sectors are suffering, but the aviation community remains one of the most affected. A visit to the Boeing giant is enough to get the palpable evidence. Indeed, the latter paints the outlook for the aviation sector in black, which is currently experiencing a sharp drop in traffic. It is obvious to all analysts that the only cause of this situation is the coronavirus. The latter has forced global traffic into the red since its advent in December. A very difficult situation that will take enough time before returning to normal. The boss of Boeing David Calhoun talks about several years (two to three) to recover the level of traffic before the health crisis.

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Air traffic: Boeing predicts 2 to 3 years for a return to normal because of the coronavirus
Image copyright: Greg Goebel - Flickr

Restoration of dividends and debts on the horizon

This Monday, the boss said that restoring the group's dividends will take time. He said during their annual meeting that this restoration will take 3 to 5 years. This clearly shows the impact of the health crisis on the group and completes the list of its difficulties. These included the group's setbacks on its 737 MAX. Boeing's situation is currently unprecedented.

For David Calhoun, the balance sheet is very bleak in the airline industry and especially for Boeing. But the group's priority remains the maintenance of its supply chain and the repayment of its debts. In his remarks, he remains realistic and warns that Boeing will have to borrow large sums of money throughout the next 6 months. However, it is necessary to have an overview of the situation of the group which gives rise to this statement.


The situation of Boeing

Indeed, Boeing was already facing difficulties due to the situation of its MAX 737, which had not flown for a year. By the way, he had 2 accidents causing 346 deaths. Boeing fears additional losses in the order of billions due to the consequences of the pandemic. This is because the pandemic has brought its operations to a halt. But in order to get support measures, he will have to talk to the U.S. Treasury.

In addition, the air traffic giant had already received a huge amount of money on behalf of a gigantic rescue plan. The amount is estimated at over $17 billion and the plan was approved at the end of last month. The aim of this impressive plan is to limit share buybacks and dividends to certain companies. These are the companies that have received the U.S. government's contribution.


His title loses 60%

Boeing must make every effort to release its quarterly results by April 29. In the meantime, it should be remembered that the group has experienced a 60% drop in its share price on the New York Stock Exchange. It thus loses more than 110 billion dollars.