The financial rating agency Standard & Poor’s announced this Tuesday, October 8, that it placed Boeing’s rating under negative surveillance. This is at a time when around 33,000 workers at the North American aircraft construction company continue to strike – which has led to the suspension of production of its best-selling planes.
If a “downgrade” occurs, Boeing will be placed in the speculative investment category – the so-called “junk”. S&P estimates that the company will incur a capital loss of approximately $10 billion in 2024, due in part to costs associated with the strike.
It is also possible that Boeing will need additional financing to meet its daily needs and to finance debt repayments at their due dates, the agency says. The construction company, Moody’s said last month, has $4 billion in debt that matures in 2025 and $8 billion due in 2026.
Companies rated “junk” typically face higher financing costs than their counterparts rated in the quality investment category.
The International Association of Machinist (IAM – which represents the company’s workers), whose members have been on strike for 26 days, is demanding a 40% increase in wages over the next four years.
The strike, in force since September 13, is the aerospace manufacturer’s first in the last 16 years and comes at a time when Boeing is facing multiple challenges, such as the consequences of the grounding – for safety reasons – of its 733 Max, the crash air travel caused by the pandemic and quality problems that led to production restrictions.
It was in January this year that US air safety regulators imposed limits on the production of Boeing’s 737 Max planes, following an incident on an Alaka Airlines flight. At that time, the Federal Aviation Administration (FAA) left the way open for these planes to resume flights after inspections, but the increase in manufacturing of this line was suspended.
The decision came after, on January 5th, during an Alaska Airlines flight, the left door of the Boeing 737-9 Max came loose from the cabin mid-flight, causing a window and a piece of the fuselage to fall out and the aircraft depressurization. The plane made an emergency landing after 35 minutes, with no injuries reported.
This 9 series of the Boeing 737, the most recent, has been mired in problems, after the same had already happened with the 8 series – with these aircraft remaining on the ground for 20 months after plane crashes in 2018 and 2019 that caused the death of 346 people.
The aeronautical group announced at the end of July that it had worsened losses to US$1.79 billion in the first half of the year and also indicated the appointment of Kelly Ortberg to lead the company, starting on August 8. The previous CEO, Dave Calhoun, had already announced in March that he would leave before the end of the year, due to serious incidents that affected the company’s image.
(news updated at 22:38)
Source: www.jornaldenegocios.pt
