Boeing ponders its bail-out options

THE CORONAVIRUS laid many of Boeing’s airline customers low—literally, for many have suspended flights. Fears about the giant’s fate, already uncertain because of the year-long grounding of its best-selling 737 MAX jet after two fatal crashes, became so rife that last month Goldman Sachs, a bank, felt compelled to stress that it “will remain a going concern”. The company itself insists likewise. It is probably right—the question is not whether it will survive but how.

Boeing has a safety net. A third of revenues in 2019 came from its defence arm, which, with its services division, will bring in $5bn in profits this year, reckons Bernstein, a research firm. It has cash on its balance-sheet, the balance of a $14bn credit line and has suspended its dividend. Dave Calhoun, Boeing’s new boss, says that the firm has $15bn in liquidity.

Jefferies, a bank, estimates that the company burns through $4.3bn of cash a month with a complete suspension of deliveries. So it may need government help if the crisis drags out. Lucky, then, that Congress folded its plea for assistance for American aviation into a $2trn stimulus package. This includes $25bn for carriers and $17bn for firms “critical to maintaining national security” (ie, Boeing). The terms are unclear and talks ongoing. But Steve Mnuchin, the treasury...

via Business Feeds

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