Aircraft maker Boeing Inc (NYSE: BA) saw shares soar initially soar by 5% early in the day but closed up around 1.3%.
The bounce came on news that the European Union’s aviation safety regulator announced that it would be carrying out test flights of the troubled Boeing 737 Max plane.
Although investors are encouraged by this development, it still doesn’t detract from the fact that Boeing’s share price is about 50% down from where they started 2020.
The company’s problems with the 737 Max – which saw two high-profile crashes in the space of five months – means that it’s battled headwinds from a safety perspective and now the impact of Covid-19.
Perhaps deemed a value play by some investors, I think Boeing’s precarious financial position – with net debt of around US$41 billion – means that it’s battling the worst-ever outlook for aircraft production with minimal cash on hand.
Although it’s likely to get some level of support from the US government given its strategic rivalry with European rival Airbus, I wouldn’t bet on Boeing’s share price taking to the sky any time soon.
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