BOEING STRUGGLING TO REGAIN MARKET, With the onset of the coronavirus pandemic, various airlines and airline manufacturing companies started facing losses because of the reduction in demand for travel but this pandemic has been tougher on the 103-year- old Boeing which is unable to raise the funds to finance its business.
One year after the crash of Ethiopian Airlines 737 MAX that killed 157 people and the lion air flight 610 which killed 189 people, Boeing has been continuously facing a severe economic crisis with The MAX which remains grounded worldwide and with numerous cancelled orders
for the 737 MAX, Boeing has started to go in loss with its shares decreasing drastically every day. Demand not only has diminished for the 737 MAX but it has also decreased for various other models such as the “Dreamliner”.
With the air travel down due to the pandemic, airline customers aren’t ordering new planes which are adding to their financial challenges. Even though their defence division is working well, they will have to make a miracle to kick back in the business in the civil aviation field to survive in the market. Boeing is being continuously accused of cutting costs on the safety area to meet profit goals which are the reason why they have no buyers. It’s expected that there will be a drop of nearly 42% in per-share earnings and a 23% decline in revenue to $19.4 billion due to which investors have started showing their backs on the firm.
On the other hand, we see that Airbus which is Boeing’s arch-rival is doing pretty well taking the current scenario into consideration. The Airbus is also well prepared for the post-pandemic period because of its advantage in narrow-body planes. Boeing has been surviving the mishap because of their clout in Washington and strong backing from people like president Donald trump which has reduced their chances of being a candidate for bankruptcy.
Boeing has benefited from a series of steps taken by the federal reserves which boosted the liquidity in the corporate debt market because of which they received a $25 billion bond offering. There are two ways by which Boeing can improve its situation, first, they can cost nut again cost-cutting was the reason why all this mishap happened, second in which their Seattle- engineers and their strict procedures should be given importance rather than the profits. Boeing should also start focusing on making narrow-bodied planes to compete with planes like Airbus A320neo which require less fuel and have fewer sits to fill and are cheaper to maintain too.