Boeing in scramble to shore up 737 MAX financing

Boeing is scrambling to shore up financing for the 737 MAX as it awaits regulatory approval for design changes after the plane was grounded following two fatal crashes, industry sources said. Boeing is anxious to resume deliveries once regulators declare it safe and airlines agree training. But confidence in the jet has been hit by the 15-month grounding, making the financing needed to ensure smooth deliveries scarce and compounding a dearth in demand due to the coronavirus crisis. “Nobody wants to take new aircraft and this is particularly true for the MAX right now,” a senior aviation financier said. The value of MAX jets on the aircraft market has fallen by 11% since the start of 2020 and is likely to face more pressure in coming months, depending on the timing of its return, Eddy Pieniazek of aviation advisers Ishka said. With capital markets unavailable after the collapse in air travel during the coronavirus crisis and banks refusing most new business, only leasing companies have spare financing capacity though many are also fighting their own problems, bankers say. Boeing’s strategy has been to encourage lessors to strike deals with airlines to buy MAX jets and rent them back to airlines. In return, Boeing is seen ready to allow the same leasing companies to cancel part of their own plans to buy MAX jets directly, easing pressure on their balance sheets.<br/>