Nearly 12 years after the US government bailed out General Motors and Chrysler groups, policymakers are discussing how to help Boeing as it grapples with the double crisis of the fallout from the emerging Corona epidemic “Coved 19” and the problems associated with its 737 planes Max ».
The aviation giant, which manufactures the US presidential plane and civilian and military aircraft, has requested about $ 60 billion in federal support for the aviation industry in the United States, without clarifying yet how the rescue plan works.
“Boeing is on the brink, and it will not survive without a government bailout,” said Bill Akman, a prominent investor in reserve coverage funds. The company mainly suffered financial pressures even before the emerging “Corona” virus crisis.
Its “737 MAX” aircraft, which were considered bestsellers, have been out of service for more than a year after two fatal disasters. This resulted in losses estimated at $ 18 billion and is expected to increase. The picture became more and more bleak as a result of the “Covid-19” crisis, with the massive decline in demand for aviation, which puts the company’s customers in difficult economic conditions.
These developments led to a decline in Boeing shares, and made its market value, on Friday, about 54 billion dollars.
The company also announced, on Friday, that it had frozen the distribution of its revenues until further notice, and that its CEO, Dave Calhoun, and Chairman of the Board, Larry Kellner, would stop the payment until the end of the year.
The company, which had previously confirmed that the buybacks had been stopped, had announced that the program would remain indefinitely suspended. The “Boeing” double crisis casts a shadow over other companies, but it still enjoys significant support in Washington due to its importance to the American economy by employing about 130,000 people. This figure does not include the largest group workers employed by the group’s 17,000 suppliers.
President Donald Trump on Tuesday gave the green light to tough measures to help companies, telling reporters at a news conference, “We must protect and help Boeing.”
In a financial evaluation published Thursday, the company stated that “there are various options that are currently being discussed to support the aviation industry in the United States”, while refusing to elaborate on the options presented.
Aid to the aviation sector, far from the fiscal stimulus plan, is estimated at $ 1 trillion and is currently being drafted in Congress.
An option for the government to acquire a stake in Boeing was discussed. “Taxpayers must obtain shares in the company in exchange for aid so that people benefit from their investment when the company is financially stable,” said Earl Blumenauer, the Oregon Democrat. Boeing should seek protection from bankruptcy, as did General Motors and Chrysler after the 2008 financial crisis in accordance with Chapter 11 and restructure its financial system.
America’s tankers need $ 58 billion in cash
American airlines are working hard to push the Trump administration and Congress into cash aid, and it says behind the scenes that the Senate’s proposal to provide billions of dollars in taxpayer-backed loans is not enough to ensure these companies continue to operate in the long run.
Last week, the US Air Transport Association, which represents American airlines, sought to push the White House to agree to its request for a $ 58 billion aid package.
Companies and US administration officials are now pressing Congress to act quickly on aid to the aviation sector, which aims to tackle the repercussions of the Corona epidemic on the industry.
These funds would help maintain the financial position of the aviation industry in the long run, according to the companies. So far, the aid package consists entirely of loans, which airlines must pay in the future.