Though not strapped for cash with approximately US$20 billion currently available based on third-quarter figures, Boeing is considering increasing its debt in light of ongoing 737 MAX problems, according to the Wall Street Journal. With failure to see the stricken 737 MAX back in service after two fatal crashes, Boeing has decided to halt production of the narrow-body jet which will lead to certain cost reductions, but these will likely be further affected by consequent delays in aircraft deliveries.
Currently, Boeing not only faces compensation claims from the families of victims aboard the two fatal flights, but is also having to make considerable compensation payments to airlines whose existing 737 MAX jets have been grounded since March, or to carriers who have had deliveries of ordered aircraft delayed. Boeing is looking to raise in the region of US$5 billion in new debt, though it anticipates first-half expenditure will exceed US$15 billion. The additional borrowing would help to maintain 737 MAX production facilities and finished planes, together with covering US$4.0 billion needed to complete its acquisition of an 80% stake in the Brazilian plane manufacturer, Embraer.
