Boeing Co. (NYSE:BA) may be seeking “tens of billions” in government loan guarantees as it continues to struggle amid the 737 Max crisis and COVID-19 pandemic impacts, according to a Reuters report.
Last week, the company reported that 2020 net order cancellations stood at 28 through February, compared to new orders received of 49 for the first two months of 2019. Bloomberg also reported last week that Boeing was planning to draw down the full amount of its $13.825 billion loan from a group of banks, as it was dealing with cash burn.
Now the company is reportedly in talks with government officials saying it seeks “significant government support to meet liquidity needs.” Earlier in the day Tuesday, U.S. President Donald Trump said the government was prepared to support the domestic aviation industry.
Disruption from the coronavirus spread continues to grow, with the airline industry particularly impacted. Domestic carriers including Delta Air Lines (NYSE:DAL), United Airlines Holdings (NASDAQ:UAL), American Airlines Group (NASDAQ:AAL) and Southwest Airlines Co. (NYSE:LUV) have all recently announced capacity reductions ranging from 20% to 75%.
In efforts that will impact Boeing directly, airlines are also looking to cut costs and preserve cash. Delta CEO, Ed Bastian, sent a memo to employees on Friday saying that due to the capacity reductions, it was deferring new aircraft deliveries, and reducing capital expenditure plans by at least $2 billion for the year.