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Boeing 737 Max aircraft are seen on Tuesday, March 12, 2019 at the company's manufacturing facility in Renton, Washington, United States.
David Ryder | Bloomberg | Getty Images
General Electric added that Boeing's 737 Max fixed assets were "a new risk" in its quarterly quarterly earnings report, citing engine production for aircraft and ownership of several aircraft for its leasing business.
GE said it "was working hand in hand with Boeing while actively monitoring the grounding of the 737 MAX fleet." Despite the addition of the aircraft to the risks of the company, GE has reaffirmed its forecast for 2019 in its report of the first quarter results.
The 737 Max was immobilized worldwide after the crash of an Ethiopian Airlines plane in March. This crash occurred five months after the crash of another Boeing Max in Indonesia. Max's anti-stall software, MCAS, is suspected in accidents that claimed the lives of 346 people.
Here's what GE said about the risks of the Boeing 737 Max:
"Aviation develops, produces and sells LEAP aircraft engines through the intermediary of CFM International, a joint venture between GE and Safran Aircraft Engines, a subsidiary of the French group Safran.The LEAP-1B engine is the exclusive engine Boeing 737 MAX In March 2019, global regulators ordered the temporary grounding of the Boeing 737 MAX fleet, with Boeing announcing a temporary reduction in the rate of production of the 737 MAX and, although CFM has the intention to continue the current production pace of LEAP-1B, the announcement could impact the timing of such related cash flow.
GECAS owns 29 of these aircraft, which are all rented to various tenants who remain obliged to make contractual rent payments. In addition, GECAS made pre-delivery payments to Boeing for 150 of these ordered aircraft and made financing commitments for the purchase of 19 additional aircraft under purchase and lease agreements. leaseback agreements with airlines.
As at March 31, 2019, we had approximately $ 1.5 billion in net assets related to the 737 MAX program, consisting primarily of pre-delivery installments and lease-backed equipment owned by the Company. progressive recoveries. No impairment losses were incurred related to the 737 MAX devices and the corresponding balances in the first quarter of 2019, as we continue to believe that these assets are fully recoverable. We continue to monitor these developments with our airline customers, our tenants and Boeing. "
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