The embattled airline maker has gathered more than $12 billion in financing commitments from more than a dozen banks. This is according to unnamed sources. The multinational company has yet to deny or confirm the report as of press time.
If the information were true, the financing could not come in the most opportune time as the airline maker is still bleeding with the financial repercussions of having to ground its 737 Max aircraft since March.
Earlier, a report said Boeing was in discussion with Citigroup, JP Morgan, Wells Fargo and Bank Of America. The manufacturer was reportedly hoping to get $12 billion in loans. It is not immediately clear whether this was the same loan granted this week and whether these financial institutions were the ones to participate in the loaning.
The Boeing Company is projected to be bleeding out approximately $1 billion monthly following 737 Max crashes with only a few months interval. The company already lost $3 billion in negative cash flow for its third quarter.
Aviation authorities from different countries grounded the Boeing 737 Max in March 2019 after the Ethiopian Airlines crashed and killed 346 people. The incident took place just within five months after Lion Air Flight 610 crashed in Indonesia on October 29, 2018. The Civil Aviation Administration of China was the first to ground the faulty aircraft.
The Boeing 737 Max might not be given the green light to fly again until mid-2020, by late June or July. That would mean that the plane's grounding could take more than 15 months. That would only mean loss profit up until the aircraft could fly again.
Boeing is expected to report its fourth-quarter financial results on January 29. The aircraft maker is expected to make public the cost of its grounding. In the meantime, analysts expect that charges have now cost about $9.1 billion and that was just for the first six months of not being able to fly the 737 Max. It is not immediately clear if analysts include in that amount the $5.6 billion write-offs the plane has to pay to cover compensation to affected parties. And, $3.6 billion more for fixing the aircraft.
In December, Turkish Airlines said it agreed to a compensation deal of unconfirmed $225 million to cover for spare parts and training. This was because Turkish Airlines received delivery of 12 737 Max planes prior to its grounding. It ordered a total of 75 units.
American Airlines, Southwest Airlines, and United have all been affected by the grounding of the 737 Max.
