Boeing is suffering severe financial crisis, worsened by ongoing operational challenges and safety concerns that have affected the company for years, according to Kazinform News Agency.
Recently, Boeing announced plans to borrow $10 billion from major banks and raise an additional $25 billion through stock and debt sales. This move is part of a broader strategy to offset financial losses accumulated over the past six years, during which the company’s debt ballooned to $53 billion by mid-2024. The situation has been made worse by a strike involving 33,000 workers from the International Association of Machinists (IAM), which has brought the production of commercial aircraft to a standstill.
In response to these growing challenges, Boeing’s CEO Kelly Ortberg announced plans to cut 10% of the company’s global workforce, affecting about 17,000 employees. Additionally, Boeing’s credit rating has dropped to just above junk bond status, and credit rating agencies warn that a downgrade could further increase the company’s borrowing costs.
Boeing’s troubles escalated after two deadly crashes involving the 737 Max, which killed 346 people. These tragedies led to a 20-month grounding of the aircraft and sparked federal investigations. Boeing has admitted to deceiving the Federal Aviation Administration during the plane’s certification process, and the company is awaiting a court decision on a plea agreement. Families of the crash victims argue that the proposed penalties are not severe enough.
Further damaging Boeing’s reputation, whistleblowers have accused the company of putting profits ahead of safety and quality. In one recent incident, a door plug on a 737 Max flown by Alaska Airlines blew off mid-flight, exposing serious manufacturing oversights. This has prompted additional federal investigations into Boeing’s production processes.
Despite these challenges, Boeing remains able to raise funds due to its crucial role in the global aerospace industry. Along with Airbus, Boeing dominates the full-size jet market, a duopoly that essentially guarantees its survival. Even though Boeing has lost market share to Airbus in recent years, its position is secure because Airbus alone cannot meet global demand for aircraft.
