Boeing Considers Dividend Cut, Layoffs Amid Cash Drain
March 19 2020 - 1:29PM
Dow Jones News
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)
Copyright (c) 2020 Dow Jones & Company, Inc.
Boeing (NYSE:BA)
Historical Stock Chart
From Aug 2024 to Sep 2024
Boeing (NYSE:BA)
Historical Stock Chart
From Sep 2023 to Sep 2024