Boeing Asks For Minimum Of $60B In Government Aid As Coronavirus Pandemic Hits Aerospace Industry

Boeing Co BA Is asking for access to public and private liquidity, which includes loan guarantees for the aerospace manufacturing industry.

What Happened

Calling itself the “number one US exporter,” Boeing made a case for supportive legislation and “appropriate policies” so that federal funding can be extended to aerospace manufacturers.

In a statement released Tuesday, the aircraft manufacturer said it supports a “minimum” of $60 billion in federal funding. Boeing said, “This will be one of the most important ways for airlines, airports, suppliers and manufacturers to bridge to recovery.” It further commented, “Funds would support the health of the broader aviation industry, because much of any liquidity support to Boeing will be used for payments to suppliers to maintain the health of the supply chain.”

Why It Matters

The Trump administration pitched a large stimulus package worth $850 billion on Tuesday, which includes $50 billion for the airline industry. President Donald Trump has said that he would back the airline industry 100%.

Last week, Boeing announced a drawdown of a $13.8 billion loan as a precaution amid struggles to get its grounded 737 MAX planes back in the air. In its statement asking for more funding, the company said, “Our delayed draw loan term was a prudent step to increase our liquidity and ease some of the significant near-term pressures on our business.”

Separately, APEX - Airline Passenger Experience Association, a global nonprofit of the world's largest international airline associations, has called for $250 billion of global government support in the wake of the COVID-19 pandemic. Airlines have been hit hard by the disease, which has been spreading like wildfire around the world and have been downsizing to skeletal levels trying to preserve cash.

Price Action

Boeing shares traded 9.54% lower at $112.30 in the after-hours session on Tuesday. The shares had closed the regular session 4.22% lower at $124.14.