Boeing Mulls Another Cut to 787 Dreamliner Production

Boeing shares are falling on a report that it may further reduce production of the 787 Dreamliner due to lagging demand.
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Boeing  (BA) - Get Report is considering another cut to 787 Dreamliner production due to sluggish demand, a media report said.

The Chicago plane maker is contemplating whether to cut Dreamliner output to 10 per month from 12, people familiar with the matter told Bloomberg. 

In October, Boeing trimmed its output of the plane, making a potential second cut worrisome to investors.

Boeing shares at last check were off 0.9% at $314.91.

The CEO of U.S. airplane-leasing firm Air Lease Corp.,  (AL) - Get Report John Plueger, said earlier this year that a drought of orders from China could lead to a reduction in production.

Boeing is still struggling with the fallout from the grounding of its 737 MAX. The jet has been grounded worldwide since two crashes involving the model -- in late 2018 and early 2019 -- killed more than 300 people.

Reports earlier this week said Boeing was in discussions with several banks to secure some $10 billion or more in loans to offset costs stemming from a production halt of the 737 MAX.

Citing people familiar with the discussions, CNBC reported on Monday that Boeing has so far secured at least $6 billion from a group of banks and is talking with other lenders about more.

CNBC said the loan Boeing is currently negotiating will likely be a delayed-draw loan, meaning Boeing can tap into it later, a move that may not immediately affect its credit rating.

Both Moody’s Investors Service and S&P in December downgraded Boeing’s credit rating. Moody's last week went a step further, saying its current A3 rating is on review due to the extended issues with the 737 MAX.