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Financier doubts add to Boeing’s MAX headaches

25 January 2020, 7:43 PM  |
Reuters Reuters |  @SABCNews
Boeing has been trying to rebuild its image with passengers and airlines following the nearly two-year grounding of the MAX after crashes in Indonesia and Ethiopia killed 346 people.

Boeing has been trying to rebuild its image with passengers and airlines following the nearly two-year grounding of the MAX after crashes in Indonesia and Ethiopia killed 346 people.

Image: Reuters

Boeing has been trying to rebuild its image with passengers and airlines following the nearly two-year grounding of the MAX after crashes in Indonesia and Ethiopia killed 346 people.

To restore faith in the 737 MAX, Boeing needs to prove its flagship jet is not just airworthy but also a safe investment.

At a gathering in Dublin this week of the titans of the multibillion-dollar aircraft leasing industry, which finances half the world’s fleet, cracks were appearing in that effort.

Boeing said on Tuesday its troubled workhorse – grounded last March after two crashes in which 346 people died – should receive approval by mid-year from US regulators, paving the way for hundreds of jets to resume service later in 2020.

But in scores of high-stakes negotiations in the background, it is trying to convince banks, leasing firms and airlines that the investment case for thousands more of the jets – worth hundreds of billions of dollars – remains intact.

Airplane owners and investors said some lenders were already demanding higher collateral in deals on the MAX. One airline said financing for pre-delivery payments had dried up amid the uncertainty – though the market won’t be fully tested until closer to renewed deliveries.

“Even people who have committed to financing previously are wondering should I extend or should I just pull back to wait to see because they don’t know the real value of their collateral going forward,” said the head of an asset-management firm active in the sector, declining to be named to preserve relations with Boeing.

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