If you’ve been dealing with a lot of pandemic-related financial issues, you can at least take some comfort in the knowledge that you’re not the CEO of a corporation that manufactures airplanes. (Unless you are, in which case: ouch, sorry.)
Reuters reports that Boeing CEO Dave Calhoun faces a $15 billion problem as the airline industry continues to get pummeled in Covid-19’s wake. On top of travel plummeting due to stay-at-home orders, Boeing’s safety scandal related to crashes of its 737 MAX airliner has put the company’s jet business in a particularly precarious position; its share of the single-aisle jetliner market has waned from last decade’s 50% to 35%, according to Reuters.
Boeing’s biggest competitor, Airbus, is faring considerably better: Its single-aisle A321neo has “snapped up billions of dollars of orders in a recently booming segment of the market,” Reuters reports–but taking April comments from its CEO at face-value, Boeing is staying positive.
“I’m confident that over a longer period of time, we’ll get back to where we need to get to, and I’m confident in the product line,” Calhoun said then.
Still, there aren’t a ton of options for Boeing, and it can’t afford any more mistakes. Really, the company’s options boil down to two: manufacturing a 5,000-mile single-aisle jet with more fuel efficiency to bring to the market by 2029, or waiting for the next big innovation in engine technology, which isn’t expected to arrive until at least 2030. It’s a delicate balance: A hasty move could just dig the company into a deeper hole, but it can’t move too slowly for the sake of its investors.
“There is no better way to fix their image than [to] invest in the future now, pure and simple,” Teal Group analyst Richard Aboulafia told Reuters.
Solution: ditch the jets and focus on space vacations. You’re welcome, Dave Calhoun.