Inflows of cash from the once-troublesome 787 Dreamliner are now sustaining the production of the grounded 737 MAX
In a twist of fate, Boeing’s BA +1.23% financial health through the 737 MAX crisis will rely heavily on what was once another problem child: the 787 Dreamliner.
During the release of its third-quarter results late in October, Boeing said the 787’s production rate would be lowered from 14 to 12 a month in late 2020 as a result of weakening demand for large jets. The model is now a key source of cash for Boeing, especially while the smaller MAX remains grounded by regulators world-wide.
Boeing spends roughly $3 billion a quarter to face debt payments and the dividend that has helped retain investors through the crisis. But producing MAX jets without selling them is creating a quarterly cash drain that seems to amount to between $4 billion and $7 billion, forcing the company to issue debt.
Excerpt from WSJ