Spirit AeroSystems secures US$350 million in advance payments from Boeing

Spirit AeroSystems has announced a critical financial arrangement with Boeing, which will provide the company with up to US$350 million in advance payments. This cash infusion is designed to alleviate some of Spirit's ongoing financial challenges, including excessive inventory levels, strained operational cash flows and escalating production costs that have put pressure on its balance sheet.

Spirit AeroSystems has been struggling to stabilise its financial position, recently voicing concerns over its ability to continue operating as a going concern. The cash from Boeing aims to support Spirit in its immediate financial needs, providing a temporary buffer against the turbulence in its operations. The advance comes with an agreed repayment plan, under which Spirit will repay 25% of the advance back to Boeing in four instalments spread throughout 2026. This structured repayment plan reflects the cautious optimism both companies hold regarding Spirit's potential recovery, but it also signals Boeing's need to ensure repayment over a manageable timeframe.

In a separate but related development, Spirit AeroSystems also announced a new arrangement with Airbus through a second amended and restated memorandum of agreement. Under this agreement, Airbus has extended a non-interest-bearing line of credit worth US$107 million to Spirit. This line of credit will serve as working capital to support production activities across various Airbus programmes, enabling Spirit to maintain delivery schedules for key Airbus components. This financial support from Airbus also underscores the shared interests of the companies to ensure the continuity of production and delivery despite Spirit's current financial instability.

Both agreements with Boeing and Airbus are temporary financial solutions to Spirit's ongoing challenges. They represent a vote of confidence from two major aerospace players in Spirit's future, but the road to recovery remains steep for the supplier.