Report: Boeing eyes $10 billion loan to weather 737 MAX crisis
With Boeing still dealing with the fallout surrounding its grounded 737 MAX jets, the company is reportedly in talks to bring in a $10 billion loan to see them through the crisis.
CNBC cites “people familiar with the matter,” who point to increasing costs incurred by a pair of fatal 737 MAX crashes.
The 737 MAX was grounded in March after two crashes that killed 346 people. The first crash included a Lion Air Max that crashed Oct. 29, 2018. The second was six months later with an Ethiopian Airlines Max on March 10, 2018.
Boeing plans to pause production on the plane entirely in January, as the company continues to await approval from the Federal Aviation Administration to reenter the MAX into circulation.
According to CNBC, Boeing has already landed at least $6 billion in loans from banks so far, but continues to negotiate with other lenders for more.
Boeing reported in October 2019 that third-quarter earnings fell 51 percent to $1.17 billion. It added another $900 million in costs for the Max, and deliveries of new planes tumbled from the previous year. In 2019, Boeing saw its worst sales figures in decades.
Meanwhile, the company recently announced it’s working with the FAA on an additional software problem in its grounded 737 MAX jetliners. This problem involves monitors that verify that key systems on the plane are functioning. One source told the Associated Press that during a recent test, one of the monitors did not start when it was supposed to.
That came shortly after CEO Dennis Muilenburg announced he’d be stepping down, effective Jan. 13. The board said a change in leadership was necessary to restore confidence in Boeing.