Boeing shares plunged 18 percent Wednesday after reports emerged that the aerospace giant planned to draw down a $US13.8 billion credit facility and its aircraft orders fell into negative territory for the first two months of the year.
The fall was the manufacturer’s worst since 1974.
Boeing shares are now 57 percent down from their peak on March 1, 2019. That was before the second Boeing 737 MAX crash and the subsequent grounding of the global fleet.
The share route came after Bloomberg reported the company planned to draw down the full amount of $US13.8 billion loan as early as Friday.
The loan from a group of banks is designed to help Boeing deal with the cash it is burning as it works through the 737 MAX crisis.
A source told Bloomberg the aerospace giant planned to draw down the loan as a precaution because of turmoil in the markets due to the COVID-19 pandemic.
Net aircraft orders for the first two months of 2020 came to -28 aircraft as 737 cancellations were offset by conversions and orders for 787s and a 767 ordered by Federal Express. Net orders for 2020 stood at -25 aircraft.
Also not helping was a report in The Washington Post about a hiring freeze to preserve cash.
The Post quoted a letter to employees from chief executive David Calhoun and CFO Greg Smith that the freeze would address “the pressures on our business that result from the pain our customers and suppliers are feeling”.
“It’s critical for any company to preserve cash in challenging periods,” they said.
“That’s why we’re implementing steps similar to what many companies are doing right now.”
Boeing has about 800 aircraft on the ground and is working with regulators to get the MAX back in the air and is sticking with a forecast mid-year return to service.
Reuters reported that Boeing had agreed to separate wiring bundles in the MAX flagged by regulators as potentially dangerous before the jet returns to service.
The new service reported the change will take roughly one week per aircraft with some of the work done as aircraft are removed from storage.
US airlines have taken the MAX out of their schedules until at least August.