Boeing Co.'s shares experienced an upward movement on Wednesday as the company's CEO, David Calhoun, arrived in Washington, D.C. for meetings with U.S. lawmakers. However, the company's bonds have yet to recover from a recent setback.
The concerns surrounding Boeing's bonds were sparked after a panel tore off a 737 Max 9 jet flown by Alaska Airlines earlier this month. In response to the government's grounding of dozens of Max 9s, United Airlines Holdings Inc. announced on Tuesday that it was reconsidering its longer-term plans for Boeing's upcoming Max 10, which happens to be the largest 737 Max jet to date.
United Airlines' decision: Reevaluating plans for Boeing's biggest 737 Max jet
In an effort to reassure the public, Calhoun emphasized, "We fly safe planes" during a discussion with reporters on Capitol Hill. He further stated that Boeing does not put any airplanes in the air unless they have 100% confidence in their safety. Calhoun's visit to lawmakers aims to foster transparency and address any concerns or inquiries they may have.
Alaska Airlines' CEO, Ben Minicucci, revealed in an interview with NBC News that loose bolts were found on "many" of its Boeing 737 Max 9s following a mid-flight blowout.
Additionally, over the weekend, a Boeing 757 aircraft operated by Delta Air Lines Inc. lost a nose wheel just as it was preparing for takeoff at Atlanta's main airport, according to the Federal Aviation Administration.
Boeing is now actively working to regain trust as it faces these significant challenges in the industry.
Boeing Bonds Experience Widening Spreads Following Alaska Airlines Incident
In early January, the incident involving Alaska Airlines caused spreads on Boeing bonds to widen. Despite the overall high-grade market experiencing tightening spreads, Boeing bonds have not yet recovered. According to data from BondCliQ Media Services, this can be seen in the chart above.
Net Selling of Boeing Bonds Continues Amid Negative Headlines
Over the past two weeks, there has been a trend of net selling for Boeing bonds as negative headlines surrounding the company persist.
Boeing's Debt Maturing in the Next Three Years
Boeing currently holds just over $17 billion worth of debt that is set to mature within the next three years.
Although Boeing's stock increased by about 2% on Wednesday and has gained 18% in the last three months, it has experienced a loss of approximately 17% since the beginning of this month.
FAA Recommends Inspection of Door Plugs for Boeing Aircraft Models
As an additional safety measure, the Federal Aviation Administration (FAA) has recommended that operators of Boeing 737-900ER aircraft visually inspect mid-exit door plugs to ensure proper securing. This announcement was made on the FAA's website earlier this week.
It is important to note that while the 737-900ER is not part of the new Max fleet, which faced groundings due to door-plug issues with the 737 Max 9, it does share the same door plug design, as stated by the FAA.
Also read: Boeing’s stock should be in the penalty box for now, investment manager says.
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