WORLD: Boeing is seeking at least $60 billion in federal support for the aerospace industry to help it navigate a battered aviation environment due to the new coronavirus, company officials said Wednesday.
The funds would include federal loan guarantees to provide liquidity for Boeing and companies in its supply chain at a time when the virus pandemic has obliterated near-term airline demand and destroyed the industry’s profitability.
“Funds would support the health of the broader aviation industry, because much of any liquidity support to Boeing will be used for payments to suppliers to maintain the health of the supply chain,” Boeing officials said in a statement.
“The long-term outlook for the industry is still strong, but until global passenger traffic resumes to normal levels, these measures are needed to manage the pressure on the aviation sector and the economy as a whole.”
Boeing’s near-term outlook had already been dimmed by the 737 MAX crisis, which was grounded a year ago following two deadly crashes.
The jet has still not been cleared to resume service and continues to face some important regulatory hoops before it will fly again.
The dual crises would threaten the survival of other companies, but Boeing still retains considerable support in Washington because of its importance to the US economy, with about 130,000 employees, a figure that doesn’t include workers at about 17,000 suppliers.
President Donald Trump on Tuesday endorsed aggressive measures to assist Boeing, telling reporters at a briefing, “we have to protect Boeing and help Boeing.”
Airlines are also suffering, and media reports say the government is looking at $50 billion in assistance that the industry has requested.
Still, federal packages for big companies could come with conditions.
Democratic presidential candidate Senator Bernie Sanders of Vermont said any bailouts to the airline industry must be conditioned on ending stock buybacks.
And Senator Elizabeth Warren, a Massachusetts Democrat who recently ended her presidential campaign, said on Twitter that companies should also be prohibited from paying dividends or executive bonuses during the period of relief and three years after.
Credit ratings agency S&P on Monday downgraded its rating for Boeing, saying its outlook has worsened and predicting a likely increase in “aircraft order deferrals, further pressuring cash flows.”
Boeing disclosed Tuesday that it has fully drawn a $13.8 billion credit agreement struck only last month with major banks, according to a securities filing.
The company still has another credit facility from October 2019, which has not been drawn on and provides “additional liquidity as we navigate the current challenges.”
Boeing seeks $60 billion in US support for aerospace industry
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Boeing seeks $60 billion in US support for aerospace industry
- Funds would include federal loan guarantees to provide liquidity for Boeing and companies in its supply chain
- Boeing’s near-term outlook had already been dimmed by the 737 MAX crisis
European gas prices soar almost 50% as Iran conflict halts Qatar LNG output
- Analysts warn prolonged disruption could push prices higher
- Some shipments of oil, LNG through Strait of Hormuz suspended
- Benchmark Asian LNG price up almost 39 percent
LONDON: Benchmark Dutch and British wholesale gas prices soared by almost 50 percent on Monday, after major liquefied natural gas exporter Qatar Energy said it had halted production due to attacks in the Middle East.
Qatar, soon to cement its role as the world’s second largest LNG exporter after the US, plays a major role in balancing both Asian and European markets’ demand of LNG.
Most tanker owners, oil majors and trading houses have suspended crude oil, fuel and liquefied natural gas shipments via the Strait of Hormuz, trade sources said, after Tehran warned ships against moving through the waterway.
Europe has increased imports of LNG over the past few years as it seeks to phase out Russian gas following Russia’s invasion of Ukraine.
Around 20 percent of the world’s LNG transits through the Strait of Hormuz and a prolonged suspension or full closure would increase global competition for other sources of the gas, driving up prices internationally.
“Disruptions to LNG flows would reignite competition between Asia and Europe for available cargoes,” said Massimo Di Odoardo, vice president, gas and LNG research at Wood Mackenzie.
The Dutch front-month contract at the TTF hub, seen as a benchmark price for Europe, was up €14.56 at €46.52 per megawatt hour, or around $15.92/mmBtu, by 12:55 p.m. GMT, ICE data showed.
Prices were already some 25 percent higher earlier in the day but extended gains after QatarEnergy’s production halt.
Benchmark Asian LNG prices jumped almost 39 percent on Monday morning with the S&P Global Energy Japan-Korea-Marker, widely used as an Asian LNG benchmark, at $15.068 per million British thermal units, Platts data showed.
“If LNG/gas markets start to price in an extended period of losses to Qatari LNG supply, TTF could potentially spike to 80-100 euros/MWh ($28-35/mmBtu),” Warren Patterson, head of commodities strategy at ING, said. The British April contract was up 40.83 pence at 119.40 pence per therm, ICE data showed.
Europe is also relying on LNG imports to help fill its gas storage sites which have been depleted over the winter and are currently around 30 percent full, the latest data from Gas Infrastructure Europe showed. In the European carbon market, the benchmark contract was down €1.10 at €69.17 a tonne
