7 May 2020: The COVID-19 pandemic continues to spread its ugly wings across the globe. Companies worldwide are doing their bit to fight this pandemic. Boeing President and CEO Dave Calhoun have issued the following letter to employees today addressing aerospace market realities:
"The global pandemic has changed the way we live and work. It is changing our industry. We are facing utterly unexpected challenges. But across the world you are demonstrating the resilience, commitment and generosity to one another, our customers and our communities that Boeing people are known for. I deeply appreciate all that you do.
And if COVID-19 has affected you directly your health, your well-being, your loved ones or your colleagues you have my sympathy and support.
The pandemic is also delivering a body blow to our business affecting airline customer demand, production continuity and supply chain stability. The demand for commercial airline travel has fallen off a cliff, with US passenger volumes down more than 95 per cent compared to last year. Globally, commercial airline revenue is expected to drop by USD 314 billion this year.
As a result, airlines are delaying purchases for new jets, putting the brakes on delivery schedules and deferring elective maintenance. We're also seeing a dramatic impact on our commercial services business, as grounded airline fleets decrease the demand for our offerings.
All of this puts near-term pressure on our cash flow. We're taking steps to keep liquidity flowing through our business and supply chain. We're reducing operating costs and discretionary spending, suspending dividend payments, extending our existing pause on stock buybacks, reducing or deferring R&D and capital expenditures, and accelerating some progress payment receipts with help from our defence customers. Our chairman and I are also foregoing our salaries for the year. And as you know, we're exploring potential government funding options and advocating for access to credit for the entire aerospace manufacturing supply chain.