Boeing Co. looking for ways out of the crisis
The U.S. aircraft manufacturer Boeing Co. has entered into a $5.28 billion loan agreement. This agreement is renewable and is designed for 2 years. Thus the manufacturer wants to reduce losses, which is experiencing a decline in commercial airline traffic.
Boeing applied to a group of banks for a loan of 4 billion dollars. In addition, the U.S. company wanted to get a credit line with a possibility of expanding it to 6 billion dollars.
Such major investment banks as JPMorgan, Wells Fargo Securities, Citigroup and others made concessions for Boeing.
For the airline, such a loan is an auxiliary tool to support its business. However, as past experience shows, such loans, in most cases, remain unused.
At the beginning of the year the representatives of Boeing announced a record loss of the company, which was caused by problems with the 737 MAX. This model is considered the best-selling of the company, but it was suspended after two crashes, which ended in the deaths of passengers. All this happened against the backdrop of reduced air travel due to the effects of the pandemic, which also worsened the situation at the American company.
To improve the financial situation, Boeing placed bonds on the market, which were presented in three tranches. As a result, the company attracted $ 9.8 billion. Most of the funds will go to repay debt, including a $13.8 billion loan, which was obtained at the height of the pandemic.
Boeing says it hopes the money will help the company out of the crisis, especially since the 737 MAX has already been tested. The Office, which deals with civil aviation in the United States, authorized the use of this aircraft model, and soon flights on it will be restored. In addition, experts are optimistic about the increase in demand for air transportation.
Boeing’s troubles began in 2019, when revenues declined and operating losses rose. In 2020 the company did not receive a single order for aircraft delivery, which happened for the first time since 1962. In the summer, production volumes dropped twofold compared to the previous period. This situation entailed the reduction of the staff, including from managerial positions. In addition, the company had to sell some real estate facilities that belonged to Boeing.
Experts hope that the company will be able to overcome difficulties, but the process of recovering indicators can take a long time. For now, management is trying to optimize processes within the business to become more effective in the current environment.