Thread: 737 MAX

Boeing stock dropped 23% yesterday on the NYSE. The military contracts may mean that the government will force some sort of a deal, but it would almost certainly leave existing shares worth zero. The only alternative would be to merge (with who?), again, in a deal that would presumably see the other company get the assets and the government absorbing most of the debt. Again, leaving existing shareholders with nothing.

The receivers could split the military and airliner business, and sell the latter. Or even subdivide it further.

Nobody is going to be making much money in the airliner business in the next decade! (Or the airline business, although the survivors could emerge and grow in a couple of years.)

Originally Posted by JDNSW

Boeing stock dropped 23% yesterday on the NYSE. The military contracts may mean that the government will force some sort of a deal, but it would almost certainly leave existing shares worth zero. The only alternative would be to merge (with who?), again, in a deal that would presumably see the other company get the assets and the government absorbing most of the debt. Again, leaving existing shareholders with nothing.

The receivers could split the military and airliner business, and sell the latter. Or even subdivide it further.

Nobody is going to be making much money in the airliner business in the next decade! (Or the airline business, although the survivors could emerge and grow in a couple of years.)

The bail outs mentioned here, and elsewhere, may help a tad...



it's a big package.

Probably help - a tad. But it is also probably a drop in the bucket that is needed (if it even gets through congress). And will do nothing to help Boeing.

Originally Posted by JDNSW

And will do nothing to help Boeing.

If airlines remain operational then they will need Boeing. There is nobody else with the capacity to build aircraft into the future. The other main player, Airbus couldn't meet their own demand prior to the Covid thing, and that situation will return.

The world will change as a result of this, of that I have no doubt. The US will demand that manufacturing will return home, particularly in essential areas such as pharmaceuticals. (They'd be stupid not to, as China now manufacture around 90% of antibiotics, and therefore have a huge lever to pull in times like this). Borders that are closing will likely remain so, particularly in the US. But international travel will resume.

The US will not allow Boeing to fail, it is far too important to them. Boeing has brought massive prestige to the US, and it is indeed still the largest manufacturer of domestic airliners, although Airbus beat it in deliveries in 2019, for obvious reasons. The 737 Max was/is a PR disaster no doubt, but it is only one of the many types built successfully by Boeing. Air Force One will NEVER be an Airbus, Bombardier, Embraer or Tupolev. It certainly won't be a Comac.

Here is an excellent analysis, albeit pre Covid.
Better Buy: Boeing vs. Airbus | The Motley Fool

Originally Posted by JDNSW

And will do nothing to help Boeing.

This might....

I think johntins has summed up the aviation and economic situation pretty well - I have to be pedantic on one point.

Originally Posted by johntins

The US will demand that manufacturing will return home, particularly in essential areas such as pharmaceuticals. (They'd be stupid not to, as China now manufacture around 90% of antibiotics, and therefore have a huge lever to pull in times like this).

COVID-19 is a virus, not susceptible to antibiotics. Thus I'm confused why everyone is suddenly rushing aorunf buying antibacterial hand 'cleanser' ?


But I see what you are getting at. There are many things which, strategically, a nation needs to be able to control to be the master of its own destiny especially at times of crisis.

The Australian government should take note!

Originally Posted by johntins

If airlines remain operational then they will need Boeing. There is nobody else with the capacity to build aircraft into the future. The other main player, Airbus couldn't meet their own demand prior to the Covid thing, and that situation will return.

The world will change as a result of this, of that I have no doubt. The US will demand that manufacturing will return home, particularly in essential areas such as pharmaceuticals. (They'd be stupid not to, as China now manufacture around 90% of antibiotics, and therefore have a huge lever to pull in times like this). Borders that are closing will likely remain so, particularly in the US. But international travel will resume.

The US will not allow Boeing to fail, it is far too important to them. Boeing has brought massive prestige to the US, and it is indeed still the largest manufacturer of domestic airliners, although Airbus beat it in deliveries in 2019, for obvious reasons. The 737 Max was/is a PR disaster no doubt, but it is only one of the many types built successfully by Boeing. Air Force One will NEVER be an Airbus, Bombardier, Embraer or Tupolev. It certainly won't be a Comac.

Here is an excellent analysis, albeit pre Covid.
Better Buy: Boeing vs. Airbus | The Motley Fool

Boeing, as a manufacturer will continue, at least in name (probably), and the US will continue to manufacture airliners. But the market for new airliners is going to be pretty thin for the next decade at a guess. And just how much what emerges from this will be the company that exists today is anyone's guess.

The 737 Max was not only a PR disaster, it was a disaster in reality, technically, financially and in human terms as well as PR.

And something worth noting - I believe that Australian companies are substantial subassembly contributors to the 737 production. So this is another hit to Australian jobs!

Originally Posted by JDNSW

But the market for new airliners is going to be pretty thin for the next decade at a guess.

Ya think? Airbus’ backlog of aircraft remaining to be delivered as of 29 February stood at 7,670. This total was comprised of 6,209 A320 Family aircraft and 547 A220s, as well as 328 A330s, 577 A350 XWBs and nine A380s. (https://www.airbus.com/aircraft/market/orders-deliveries.html)

Can't quickly find figures for Boeing.

Originally Posted by JDNSW

The 737 Max was not only a PR disaster, it was a disaster in reality, technically, financially and in human terms as well as PR.

I think that goes without saying, John. 346 Lives. And the tragedy for their families.

Originally Posted by JDNSW

And something worth noting - I believe that Australian companies are substantial subassembly contributors to the 737 production. So this is another hit to Australian jobs!

It's hard to find confirmation of that online ad hoc. Aus was definitely involved with the 737 Wedgetail.

737 manufacture continues as we speak, it's just the Max production that has been suspended.