Boeing CEO David Calhoun has warned shareholders that dividend payments would not be seen for years due to a massive drop off in demand for new aircraft.

The warning comes just days after Airbus CEO Guillaume Faury wrote a letter to employees warning that job cuts were likely with the OEM “bleeding cash” following order delays and cancellations and a halt in deliveries due to social distancing restrictions. Airbus has cut its output by a third.

“Unpredictable and fast-changing environment”

Speaking to shareholders yesterday, David Calhoun said: “We are in an unpredictable and fast-changing environment, and it is difficult to estimate when the situation will stabilise.

We know we are going to have to borrow more money in the next six months in order to get through this really difficult moment.”

Boeing faced financial difficulties before the pandemic with the 737 Max fleet grounded for more than a year following two fatal crashes which killed 346 people. The manufacturer was already offering redundancy and early retirement packages to employees before the coronavirus crisis.

Commercial aircraft market will be “smaller” after pandemic

Calhoun added that when flights resumed after the pandemic, there would be major changes within the sector. He said: “When it does, the commercial market will be smaller and our customers’ needs will be different.”

Production was halted at Boeing’s Seattle plant for several weeks due to the pandemic but the company has announced that assembly at its South Carolina plant is due to restart within the week.

Boeing is expected to apply for a share of 17 billion dollars (£13.7 billion) in low-interest loans from US Congress which has been set aside for defence companies.