Boeing CEO Would Oppose Aid Tied to Government Stake -- WSJ

By Andrew Tangel 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (March 25, 2020).

Boeing Co. Chief Executive David Calhoun suggested he would decline taxpayer aid if lawmakers require the government to take an equity stake in the beleaguered aerospace giant.

"I don't have a need for an equity stake," Mr. Calhoun said in a Tuesday interview on Fox Business Network. "If they forced it, we'd just look at all the other options, and we have got plenty."

Mr. Calhoun's comments came as Congress was negotiating details of an aid package of more than $1.6 trillion aimed at blunting the economic fallout from the worsening novel coronavirus outbreak. The package could benefit businesses including Boeing and U.S. airlines and provide support for workers.

The Treasury Department took equity stakes in banks as part of the Troubled Asset Relief Program during the banking crisis in 2008.

Instead of the government taking an equity stake in Boeing, Mr. Calhoun expressed support for taking out taxpayer-funded loans and repaying them with interest.

"I want them to support the credit markets, provide liquidity, allow us to borrow against our future, which we all believe in very strongly," Mr. Calhoun said.

To ease its cash crash, Boeing has suspended its dividend and drawn down a credit line. It is seeking at least $60 billion in public and private aid for itself, its suppliers and the broader aerospace industry. On Monday, Boeing said it would halt production in the Seattle area for two weeks to curb the spread of the virus.

Mr. Calhoun acknowledged air travel is already virtually grinding to a halt, but expressed confidence the aviation industry would recover more quickly than more dire forecasts predict.

Major U.S. airlines are drafting plans for a potential voluntary shutdown of virtually all passenger flights across the U.S., according to industry and federal officials, The Wall Street Journal reported.

Government agencies also are considering ordering such a move and the nation's air-traffic control system continues to be ravaged by the coronavirus contagion. No final decisions have been made by the carriers or the White House, these officials said

On Tuesday, the International Air Transport Association offered its latest forecast for global airline traffic, saying it would fall 38% in 2020 and cost carriers $252 billion in revenue. That is double its prior estimate of the impact of the coronavirus as it intensifies efforts to persuade governments to provide financial support for the industry.

The near-grounding of many airlines' service as demand collapsed has forced them to park thousands of planes and left many carriers running out of cash, triggering job cuts as governments continue to expand travel restrictions.

"We need a full-speed rescue package now," Alexandre de Juniac, IATA's chief executive said on a call with reporters. Industrywide, airlines are looking for around $200 billion in support to cover their fixed costs.

--Doug Cameron contributed to this article.

Write to Andrew Tangel at [e-mail]

(END) Dow Jones Newswires

March 25, 2020 02:47 ET (06:47 GMT)

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