Dave Calhoun, the CEO of Boeing expressed his worries about how a slow rollout of the COVID-19 vaccine is affecting the travel industry. He said that a 'much-hoped-for recovery' in travel demand will now be prolonged until mid-to-late summer.
“I think all of us were hoping that vaccine distribution would go a little more smoothly,” Calhoun said in an interview with CNBC.
He explained that leisure and business travel can only boom once the majority of the population is vaccinated, but that will take several more months.Boeing has recorded an annual net loss for 2020 due to the pandemic. It pushed the airlines to put on hold or scale back projects to add new jets to their fleets.
The aerospace giant, which saw its revenues ravaged by the commercial airline downturn due to Covid-19 and the 20-month grounding of its 737 MAX model, now expects first deliveries of the widebody 777X in late 2023, compared with the earlier time-table of 2022.
Frequently Asked Questions
A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.
There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.
Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.
The accounting for the 777X prolongation pushed Boeing's fourth-quarter loss to $8.4 billion, plunging its tally for all of 2020 to $11.9 billion in the red.
The past year "was a year of profound societal and global disruption which significantly constrained our industry," said Chief Executive Dave Calhoun. "The deep impact of the pandemic on commercial air travel, coupled with the 737 MAX grounding, challenged our results.
"I am proud of the resilience and dedication our global team demonstrated in this environment as we strengthened our safety processes, adapted to our market and supported our customers, suppliers, communities and each other."
In light of radically worsened market conditions, Boeing has taken a sledgehammer to costs, announcing job cuts of some 30,000 employees over two years. The company also completed a $25 billion bond offering to provide liquidity to ride out the downturn.