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Emirates president Sir Tim Clark, Boeing’s largest twin-aisle jet customer, became the first industry leader to openly suggest the aerospace industrial institution’s current financial state has put it on a trajectory to bankruptcy protection, unless it rapidly shores up its equity position.
In an email to The Air Current following the announced Oct. 11 delay to the certification of Boeing’s 777-9 flagship jetliner, Clark said, “Unless the company is able to raise funds through a Rights Issue, I see an imminent investment downgrade with Chapter 11 looming on the horizon.”
Chapter 11 refers to the U.S. bankruptcy code that offers protection to a business from its creditors while a formal restructuring takes place as its operations continue.
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While the investment community is increasingly anticipating an estimated equity raise of $10 billion by Boeing to shore up its balance sheet and stave off a downgrade in its credit rating, Clark’s comments add new urgency to Boeing’s closely watched next moves. Ratings agency S&P Global last week placed the company on “CreditWatch negative” and expected to make a decision on its investment-grade rating before year’s end.
Clark has been sharply critical of Boeing for years, not just as a longtime customer of hundreds of its long-range aircraft, but as a statesman and longtime student of the industry. In 2021, Clark told TAC that Boeing was not fully appreciating the extent to which it had become strategically mismanaged in the years leading up to and through the 2018 and 2019 737 Max crashes, subsequent grounding of the single-aisle jet and later the protracted delivery halt on its 787 Dreamliner.
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