Boeing Hit While Down by COVID-19 PandemicFri, 03/20/2020 - 16:08
The COVID-19 pandemic that has infected almost 200,000 individuals is also strongly impacting numerous economic sectors, hurting stock markets, businesses and economies across the globe. The aviation and aerospace sectors have been specially hit, as travelers suspend both work and leisure travel. Amid this crisis, US aerospace giant Boeing, which was still dealing with the fallout from two fatal crashes, finds itself in a precarious position amid the pandemic.
Last year was not good for Boeing. Two 737 Max crashes within five months led governments across the globe to ground the plane. While at first the company was positive that it could find a solution to its faulty MCAS system and put the planes back in circulation within months, the aircraft’s grounding has extended to this date. This placed airlines that flew 737 Max in the uncomfortable position of filling demand with less planes for the foreseeable future. Moreover, the uncertainty caused orders for the 737 Max, which was once Boeing’s fastest selling plane, to dry out.
It was under these circumstances that the planemaker had to face the COVID-19 pandemic. As some countries close their borders, travelling demand is going down and airlines are cancelling their flights. Moreover, stock markets in many countries are collapsing and with them the profits of some companies. These circumstances have cause Boeing’s stock to drop sharply for many days in a row, with a 27.4 percent fall just during the first hours of March 18. The US giant has also recently seen its S&P rating dropped from A- to BBB.
As the pandemic continues, airlines and planemakers face themselves in a precarious position to deal with free-falling markets and rapidly shifting national and international policies and preferences on travel. Boeing, in the meantime, is seeking a multi-billion-dollar loan that might save the company and its numerous suppliers.