Can Boeing and the 737 survive?

[Ansett]

One has to ask with aircraft parked up all over the place and the MAX still not operational and not looking as if it will be for some time. Can the 737 survive?

When demand returns it will do so softly and over a long period of time, many of the aircraft parked or under construction may not be needed for years, with out the cash cow that is the 737 what effect will it have on Boeing as a company going forward.

Will the the New 797 ever see the light of the day, how many 777 will end up being delivered.

Again what effect will all this have on Boeing in the short medium and long term.

 

[Ansett]

Boeing 737 MAX & COVID-19: What's The Impact?

While we know that the coronavirus crisis is having a huge impact on airlines globally, what impact does it have on Boeing and the 737 MAX?

onemileatatime.com

What do you think good for airlines or good for Boeing?

 

[Himeno]

The global need for new aircraft and pilots isn't going away. It's just being delayed a bit.

 

[Ansett]

Boeing suspends dividend, CEO foregoes pay after coronavirus-related aid request

Boeing Co <BA.N> will cancel CEO pay, suspend its dividend and extend a pause on share buybacks, the U.S. planemaker said on Friday, as companies eager for government aid to curb fallout from the coronavirus face pressure to cut payouts to investors.

www.reuters.com

And asks Government for $60 billion dollar loan Guarantee

Executives forego pay.

Will it be enough

 

[jb747]

Boeing spent $45 billion on share buy backs. That has simply evaporated as the share price tanked. Bet they wish they had that money now.

Perhaps governments might come to their senses and ban share buy backs (previously the case), which have simply been used by CEOs to artificially boost share prices, and so enrich themselves, but offers no benefit at all to the company.

 

[moa999]

If it hadn't been a buyback would have been a dividend, or debt repayment or value destroying acquisition.

Unlike Australia, there isn't a benefit to shareholders from a dividend (franking credits), so management will pick what works for them

 

[PaulllM]

The global need for new aircraft and pilots isn't going away. It's just being delayed a bit.

Spot on, demand for air travel will return, the oil price will rise again and the search for modern and efficient planes will continue. Historically after a major economic shock there is a boom economy.

I've been keeping a eye on Boeing stocks and I'm seriously considering investing in it.

 

[jb747]

If it hadn't been a buyback would have been a dividend, or debt repayment or value destroying acquisition.

Debt repayment. What a novel idea.

Whilst there will eventually be a rebound, you’d have to wonder just how long those aircraft will have been sitting around at that point. I can’t see airlines buying much again for at least a few years, and many, if not most, will go to the wall during this event, and so most of the buyers for whom the 737s have been built will evaporate.

I wouldn’t be at all surprised if many of the paused 737s end up in matte grey colours.

 

[UP4014]

I'm wondering if Boeing will end up nationalized. The Govt runs it for 5 maybe 10 years to get some return then it goes back on the market.

 

[Brissy1]

I'm wondering if Boeing will end up nationalized. The Govt runs it for 5 maybe 10 years to get some return then it goes back on the market.

That worked for their motor industry, gave $80billion in return for equity. Ended up losing only $10 billion when they finally sold out. Small price to save a million jobs, wouldn't have taken long to get that back in income tax from the millon workers ($10,000ea) and saved a trillion $ industry

 

[p--and--t]

I guess it all depends how long they can last during the hiatus.

Three to six months of not flying for most fleets extending the lifetime of the fleet and delaying the decisions to purchase new.

Several airlines collapsing and many surplus still usable planes suitable for use at bargain prices negating the need for new for quite a long time.

When airlines begin flying again the routes & frequency will be limited by who is in lock-down and who is not reducing the usage of planes extending their life and pushing back purchasing decisions.

The remaining airlines will have badly damaged balance sheets and reviewing whether they need to compete on who has the newer fleet and merely worrying about surviving, not many new planes required for a couple years in that scenario.

Sure demand for new planes is in the distant horizon and things will get back to normal, just like the GFC etc, but can they last that long with no sales.

 

[ethernet]

Boeing share price was savaged, yet on the rebound, even though they have lost their mandate. But up 20% today? 737 is also a dud because closer seat configurations/less leg room is not good in a corona era. A bigger threat to them is premium front end pax avoiding 737's. Now who pays the resale losses on undelivered planes? My bet is orders will be allowed to be cancelled.

 

[wannabeinvestmentbanker]

Boeing is 'too big to fail'. When a single company has a material impact on national GDP you know its significant. Trump even stated this explicitly in a recent interview.

Boeing has extended its moratorium on share buybacks and suspended its dividend.

I agree with what Goldmans put out yesterday - we do not believe the demand to fly will be structurally lower and that air traffic growth will return to its historical 2X global GDP multiple in the near-medium term.

I can't speak from a technical/engineering point of view, but the 737 definitely has a role to play. As catching a plane becomes like catching a bus (I travel within Australian weekly so consider my commute on a plane), small, cost-efficient aircraft will remain popular. Just look to the proliferation of air travel in China and all the regional cities to connect and it becomes pretty self evident that a 737 type aircraft is in demand.

 

[drron]

Boeing is ceasing production in Seattle for 2 weeks ostensibly to thoroughly clean the plant.

Boeing to Temporarily Suspend Puget Sound Production Operations in Response to Escalating COVID-19 Pandemic

Boeing [NYSE: BA] announced a temporary suspension of production operations at its Puget Sound area facilities in light of the state of emergency in

www.miragenews.com

 

[Ansett]

Boeing is expected to get billions of dollars in bailouts from the Senate, despite backlash over the 737 Max crisis and past stock buybacks

A provision tucked into the Senate bailout offers $17 billion in loans to companies "critical to maintaining national security," with Boeing in mind.

www.businessinsider.com.au

 

[p--and--t]

Boeing is expected to get billions of dollars in bailouts from the Senate, despite backlash over the 737 Max crisis and past stock buybacks

A provision tucked into the Senate bailout offers $17 billion in loans to companies "critical to maintaining national security," with Boeing in mind.

www.businessinsider.com.au

The reporter has got his billions & trillions mixed up.

 

[ethernet]

I thought under WTO, state subsidies of any industry, is a no-no. I understand the US is still investigating illegal state subsidies for Airbus and partners. We lost our car industry, but GMC gets dobs of cash too. The double standards, for say Huawei. But Boeing, many shares held by Swiss intermediaries is hardly in need of anything.

The airline industry could be started NOW - if there was end-to-end sanitation corridors for travellers and tests. Now there is false talk about Covid re-infection and new waves, the airline industry is looking like a one year grounding. Note there is now moves afoot to stop company dividends, including banks. demand is going to be elusive.

 

[OZDUCK]

The ongoing problems at Boeing continue. Predictably, Embraer is very unhappy and their Lawyers pencils, and fee calculators, are already being readied. This all seems to stem from Boeing's ill-advised dumping complaint against the Bombardier C- Series jet. The outcome of which was to gift Airbus with a ready made smaller plane at almost no cost and leave Boeing with no 'modern' smaller jet - I am of course discounting the 737-Max as being a modern jet.

Boeing - Embraer Deal Cancelled - PPRuNe Forums

Rumours & News - Boeing - Embraer Deal Cancelled - https://www.seattletimes.com/busines...se-of-embraer/ Boeing kills its $4.2 billion purchase of Embraer April 25, 2020 at 7:30 am By Dominic Gates Seattle Times aerospace reporter After more than two years of negotiations, Boeing on Friday...

www.pprune.org

 

[jb747]

The US will behave as it always does. Just because they say you can't do something does not mean that they can't.

Just like their version of 'open skies'. They mean your open skies, not theirs.

 

[Sprucegoose]

Boeing is 'too big to fail'. When a single company has a material impact on national GDP you know its significant. Trump even stated this explicitly in a recent interview.

Boeing has extended its moratorium on share buybacks and suspended its dividend.

I agree with what Goldmans put out yesterday - we do not believe the demand to fly will be structurally lower and that air traffic growth will return to its historical 2X global GDP multiple in the near-medium term.

I can't speak from a technical/engineering point of view, but the 737 definitely has a role to play. As catching a plane becomes like catching a bus (I travel within Australian weekly so consider my commute on a plane), small, cost-efficient aircraft will remain popular. Just look to the proliferation of air travel in China and all the regional cities to connect and it becomes pretty self evident that a 737 type aircraft is in demand.

I saw a Bloomberg story on the Max they said it needed a complete redesign, the old body it was based on doesn’t work for those configurations. Boeing promised that pilots would not be required to be re-trained. Interesting. It’s a managment failure. Boeing went from being a competant engineering company focused a great product to being driven by share buyback schemes and artificial factors which create the illusion of wealth (no substitutes for hard work and a great product).

They were morally bankrupt given the messages from the whistle blowers out there. It seems they had lost their passion for solving engineering issues.

They will be supported by the American Goverment who may take equity in them until the new management can rebalance the business.

As for business demand for flying, we have pretty much proven we can do 90% from home, the demand won’t spring back to what it was. Qantas may take the Q400 off the SYD-MEL route and fly direct would be my prediction.

Post automatically merged: Apr 27, 2020

That worked for their motor industry, gave $80billion in return for equity. Ended up losing only $10 billion when they finally sold out. Small price to save a million jobs, wouldn't have taken long to get that back in income tax from the millon workers ($10,000ea) and saved a trillion $ industry

I thought they made money on the deal?