Boeing to Provide $350 Million to Spirit AeroSystems

By David Shepardson and Allison Lampert

(Reuters) – Spirit AeroSystems announced on Tuesday that Boeing (NYSE:BA) will make advance payments of up to $350 million to support the financially struggling supplier, which has faced four consecutive years of losses.

Last week, it was reported that Spirit and Boeing were nearing a funding agreement as Spirit contended with financial challenges and issued a "going concern" warning. The fuselage supplier anticipates burning through approximately $450 million to $500 million over the final quarter of 2024 and the first half of 2025, per their filings.

> "This agreement helps improve our liquidity. We continue to pursue a range of options to address our financial and spacing storage constraints and are working with our customers on these matters," said Spirit spokesperson Joe Buccino.

The advanced payments aim to enable Spirit to produce Boeing products at required rates while addressing high inventory levels, reduced operational cash flows, a decrease in expected deliveries to Boeing, increased factory costs, and lingering effects from a recent strike involving Boeing employees.

Spirit will need to repay the $350 million by 2026, and its shares experienced a 1.2% rise following the announcement.

Boeing is working to revive its supply chain and jet production after a 53-day strike halted most of its operations, with plans to gradually resume production of its 737 MAX as machinists return to work.

Previously, Spirit had drawn down a $350 million bridge loan established when Boeing agreed to acquire the supplier, alongside other advances from Boeing and rival Airbus that remain unpaid.

Spirit Aero's finances have stalled due to a decline in Boeing MAX production after a mid-air blowout incident on January 5. Additionally, a new fuselage vetting process introduced in March further delayed deliveries, resulting in a backlog of fuselages in and outside Spirit's extensive Kansas factory.