Boeing Seeks $10 Billion in Loans As Costs From 737 Max Crashes Increase
Boeing, reeling from two crashes of its 737 Max planes that killed 346 people, is reportedly in talks to secure $10 billion in bank loans.
According to media reports, Boeing is aiming to shore up cash as costs from the two crashes continue to rise.
RELATED: NEW INTERNAL BOEING DOCUMENTS SHOW EMPLOYEES DOWNPLAYED SAFETY ISSUES WITH 737 MAX 8
Boeing has already secured $6 billion
CNBC reported the company already has commitments for $6 billion or more from banks and is in discussions with other lenders to increase the amount to $10 billion. CNBC noted the total amount Boeing borrowers could increase if banks show interest in lending to the airplane manufacturer.
While Boeing isn't in need of cash immediately there are concerns that the costs associated with the fallout from the crashes could steadily rise as the plane's return to service continues to be delayed. The company just disclosed last week it found another software bug with the 737 MAx that is delaying certification. Boeing doesn't make money off the planes until they are delivered. In December Boeing said it was halting production of the plane during the last month of the year.
737 Max may be grounded for awhile
Reuters reported last week that the Federal Aviation Administration isn't likely to sign off on the plane returning to the skies until at least March but it may be pushed out to April or even further.
So far the grounding of one of its popular planes has cost the company more than $9 billion. Boeing will shed light on where costs stand now when it reports fourth-quarter earnings at the end of January.
In addition to the costs of halting production, Boeing has to compensate airlines for flights that were lost as a result of the grounding as well as help its supply chain, reported Reuters. The report noted some analysts peg Boeing's losses from the crash because the plane is grounded at $1 billion a month.
A pair of marine archaeologists find "a treasure trove" aboard a sunken 15th-century Norse ship after several previous expeditions failed to spot it.