As the coronavirus pandemic has dealt a blow the international air transport service, Boeing has decided to follow fellow US airlines and suspend dividends, CEO pay, and extend a pause on share buybacks in a move to receive financial support from the US government.
The company expects to receive at least $60 billion in US government loan guarantees because besides the coronavirus pandemic, the business has been experiencing severe problems from the year-long grounding of its fleet.
US lawmakers, as well as US President Donald Trump, previously insisted that they would require limits on executive compensation, buybacks, and dividends to provide financial assistance.
"When we did a big tax cut, and when they took the money and did buybacks, that's not building a hangar, that's not buying aircraft, that is not doing the kind of things that I want them to do. I am fine with restricting buybacks - in fact I would demand that there be no stock buybacks. I don't want them taking hundreds of millions of dollars and buying back their stock because that does nothing", Trump said on Friday.
The expected financial aid that may be increased to up to $2 trillion, according to White House's economic aide Larry Kudlow, will be the largest in history. In 2008, Congress allocated $700 billion amid the global financial crisis, of which less than $450 billion was eventually invested in the economy.
As the coronavirus continues to spread, more than 270,000 cases have been registered worldwide, with over 11,000 fatalities. The US has more than 18,000 confirmed COVID-19 cases, including 227 deaths and 147 recoveries, according to Johns Hopkins University.
A Nairobi-bound Boeing 737 MAX 8 crashed on 10 March 2019 outside Addis Ababa, Ethiopia, six minutes after takeoff. The crash killed all 157 people on board, and prompted airlines around the world to halt all 737 MAX 8 flights until further notice.
The 10 March accident followed the 29 October 2018 crash of a Lion Air 737 MAX 8 into the Java Sea, just minutes after takeoff from the Indonesian capital of Jakarta. All 189 passengers and crew on board were killed in that incident.