BA Boeing Co

By Andrew Tangel and Doug Cameron 

Air traffic may not bounce back for two or three years, Boeing Co. Chief Executive David Calhoun said, outlining the tough outlook for global aviation to the plane maker's shareholders on Monday.

"The health crisis is unlike anything we have ever experienced," Mr. Calhoun said in remarks at the annual meeting. "It will be years before this returns to pre-pandemic levels."

Mr. Calhoun laid out the coronavirus pandemic's toll on the industry: Global airline revenues set to drop by $314 billion this year. In the U.S., more than 2,800 planes idled. Passenger demand is down 95% from last year.

"We are in an unpredictable and fast-changing environment, and it is difficult to estimate when the situation will stabilize," he added. "But when it does, the commercial market will be smaller and our customers' needs will be different."

Mr. Calhoun offered few specifics about production cuts or planned job cuts, leaving more details for Wednesday when Boeing reports first-quarter results, the first official glimpse into the pandemic's financial turmoil.

Boeing has been weighing production cuts and layoffs and has recently been considering a plan to cut its workforce by about 10%.

The Chicago aerospace giant's customers have been canceling and deferring plane orders, intensifying financial strains stemming from the 737 MAX debacle following the global grounding of that aircraft after two fatal crashes took 346 lives.

Mr. Calhoun's remarks come as his counterpart Guillaume Faury, CEO of Boeing's rival Airbus SE, said the European plane maker was bleeding cash and needed to cut costs and jobs.

"The survival of Airbus is in question if we don't act now," Mr. Faury said in a letter to employees last week.

Boeing has been in talks with the U.S. government over potentially billions of dollars in taxpayer help as it faces the aviation industry's increasingly bleak outlook.

Facing plummeting demand for new aircraft during the pandemic, Boeing last weekend walked away from a $4 billion deal for Brazilian regional jet maker Embraer SA's commercial arm. Embraer said Monday it has started arbitration over the failed deal.

Boeing's board nominees won a majority of votes in shareholders' election, despite two influential proxy advisory firms' recommending votes against some key directors because of their role in the 737 MAX crisis.

Write to Andrew Tangel at Andrew.Tangel@wsj.com and Doug Cameron at doug.cameron@wsj.com

(END) Dow Jones Newswires

April 27, 2020 11:06 ET (15:06 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.