Bulletin: Boeing Co. Ratings Not Affected By $5.6 Billion Pre-Tax Charge To Compensate Airlines For The Grounding Of The 737 MAX

WASHINGTON D.C. (S&P Global Ratings) July 19, 2019--S&P Global Ratings today said that its ratings on Boeing Co. (A/Stable/A-1) are not affected by the company's announcement yesterday that it will be taking a $5.6 billion pre-tax charge to compensate airlines for the grounding of its 737 MAX aircraft and the suspension of deliveries. We expect that only a small portion of that amount will be cash compensation, which the company will likely pay out in the next six to nine months. The remainder will likely be in the form of discounts on future orders, free upgrades or services, or the rescheduling of deliveries that will occur over the next few years. Boeing also announced that it will be adding $1.7

...July 19, 2019 WASHINGTON D.C. (S&P Global Ratings) July 19, 2019--S&P Global Ratings today said that its ratings on Boeing Co. (A/Stable/A-1) are not affected by the company's announcement yesterday that it will be taking a $5.6 billion pre-tax charge to compensate airlines for the grounding of its 737 MAX aircraft and the suspension of deliveries. We expect that only a small portion of that amount will be cash compensation, which the company will likely pay out in the next six to nine months. The remainder will likely be in the form of discounts on future orders, free upgrades or services, or the rescheduling of deliveries that will occur over the next few years. Boeing also announced that it will be adding $1.7 billion to the total 737 program's cost due to the higher costs related to the longer-than-expected period of reduced production. This brings the total additional production costs to $2.7 billion, which will modestly reduce the company's margins on the aircraft (though they will...

Bulletin