Boeing Considers Dividend Cut, Layoffs Amid Cash Drain

By Andrew Tangel and Doug Cameron

Boeing Co. is considering cutting its dividend and possibly laying off workers at its jetliner plants, people familiar with the matter said, as America's largest manufacturer grapples with an unprecedented disruption to the global airline industry.

The coronavirus-driven collapse in passenger traffic has forced airlines to park hundreds of planes and left them unwilling to take new ones, as Boeing was still trying to overcome the yearlong grounding of its 737 MAX.

The crisis has erased nearly 70% of Boeing's market value in 2020 and threatened its production. In response, the company has pushed for a $60 billion package to support it and the aerospace manufacturing sector. It also is preparing for a potential halt in production amid the outbreak.

"Nobody's flying," a Boeing official said. In response, Delta Air Lines Inc. this week said it had cut 70% of its flying until demand improves and is parking 600 jets, two-thirds of its fleet. It won't take any new jets this year.

Airlines are deferring deliveries from this year after the near-collapse in passenger traffic, and cancellations are on the rise, starving Boeing of new cash and draining liquidity in the form of deposit refunds. Cargo planes, once a source of strength, are also under pressure. FedEx Corp. said this week that it had pushed back delivery of some jets until 2023.

Boeing's European rival, Airbus SE, whose shares have fallen almost as much as Boeing's this year, is also seeking government support in Europe. Its global supply network is entwined with that of Boeing, raising questions about how packages on both sides of the Atlantic could be structured.

Boeing's market value approached $50 billion on Thursday, with analysts ascribing more than half of this to its defense business versus its larger commercial-airplane division.

--Alex Leary contributed to this article.

(END) Dow Jones Newswires

March 19, 2020 13:14 ET (17:14 GMT)

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