Boeing Widebody Deliveries Fall Short
November 12 2019 - 11:27AM
Dow Jones News
By Doug Cameron
Boeing Co. said Tuesday that deliveries of wide-body jets
continue to lag targeted production rates, putting further pressure
on cash flows weakened by a grounding of the 737 MAX now entering
its ninth month.
The aerospace giant handed over a dozen of its 787 Dreamliners
last month, having boosted monthly production to 14, taking
deliveries so far this year to 125.
Investors have become increasingly focused on Boeing's liquidity
position as the prolonged MAX grounding drains cash, pushing the
company to rely more on deliveries of twin-aisle planes, defense
equipment and services to bolster its balance sheet.
Boeing handed over 20 jetliners in October, down from 57 in the
same month last year. Monthly 787 deliveries have only matched or
surpassed production rates five times this year, and Boeing's
inability to hand over any MAX jets leaves it on track to end 2019
with little more than 400 jetliner deliveries, half last year's
total.
Boeing did secure orders for 10 more wide-body jets in October,
including two 777 freighters from Deutsche Lufthansa AG and five
787s from Air Lease Corp. An unidentified customer is buying two
more 787s, and Boeing also added one MAX order, which was swapped
from another customer.
The company has said no MAX orders have been canceled because of
the grounding, which followed two fatal crashes of the single-aisle
jet. Boeing estimates it will pay an initial $6.1 billion in
compensation to MAX customers in the form of cash, services and
order exchanges.
Airlines are using the opportunity to rejig their order books.
Air Lease swapped a deal for 15 of the planes for five 787s, while
three more MAX jets were removed from the books as part of an order
for 777s announced earlier this year. In total, 21 orders were
removed from the books last month, taking Boeing's year-to-date net
order loss to 94. It still has around 4,500 orders for the MAX.
Rival Airbus SE delivered 77 jets last month, and though it cut
its own full-year guidance because of production problems, it's
still on track to overtake Boeing and hand over 860 aircraft in
2019.
Both plane makers have struggled this year to match the pace of
orders that have created a combined backlog of more than 13,000
jets. Passenger traffic growth has slowed and air cargo business is
down sharply because of trade and tariff concerns, pressuring
airline profits.
Airbus last month more than doubled its order backlog for the
year with 415 new orders, including a megadeal for 300 narrowbodies
from its existing A320neo customer, Indigo, a unit of India's
InterGlobe Aviation Ltd. The tally lifted Airbus's orders this year
to 730 jets, led by demand for its single-aisle family that
competes with the MAX.
--Benjamin Katz contributed to this article.
Write to Doug Cameron at doug.cameron@wsj.com
(END) Dow Jones Newswires
November 12, 2019 11:12 ET (16:12 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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