Boeing Loses More 737 MAX Orders--Update
November 12 2019 - 3:03PM
Dow Jones News
By Doug Cameron
Boeing Co. said it has lost orders for about 200 of its 737 MAX
jets this year because of airline bankruptcies and customers
swapping out for other models from the U.S. plane maker.
While Boeing said there have been no direct cancellations
because of the global grounding of the jet in March, last month its
MAX backlog was reduced by another 18 planes as two customers
changed existing orders. The Chicago-based company currently has
outstanding orders for 4,525 MAX jets.
Customers routinely swap aircraft orders, but the MAX backlog is
under intense investor scrutiny following repeated delays in the
plane's return to service following two fatal crashes.
Airlines and leasing companies often have to pay a penalty to
change orders, but Boeing is under pressure to compensate its
customers affected by the MAX grounding. The aerospace giant has
set aside an initial $6.1 billion that it expects to pay over the
next several years in the form of cash, discounts and services.
The Wall Street Journal reported that Boeing hopes to secure
regulatory approval to hand over some MAX jets next month, though
new pilot training would prevent the aircraft from returning to
passenger service until 2020.
Air Lease Corp., one of the world's largest plane-rental
companies, swapped 15 of its MAX orders for five 787 Dreamliners in
October, according to Boeing's latest order and delivery update
Tuesday. Another customer, who wasn't identified, dropped an order
for three MAX jets during the month in favor of two 777
aircraft.
Meanwhile, Air Lease said last week that it recently secured a
new deal to rent MAX jets to an unidentified customer, adding that
Boeing is helping some airlines pay rent on their grounded jets.
Another unidentified customer also ordered a single MAX last month,
taking a plane previously reserved for another buyer.
The order book for MAX aircraft took a big hit from the collapse
of India's Jet Airways Ltd. in April, with Boeing scratching the
last of 125 orders from the airline in September.
Boeing continues to produce 42 of its 737 jets a month, storing
them at facilities in Washington state and Texas. Including those
jets, an estimated 650 MAX planes remain parked around the world.
The freeze on MAX deliveries has left the company relying more on
deliveries of twin-aisle planes, defense equipment and services to
bolster its balance sheet.
However, deliveries of wide-body jets continue to fall short of
Boeing's production goals. The company handed over a dozen of its
787 Dreamliners last month to customers, having boosted monthly
production to 14. Dreamliner deliveries so far this year stand at
125.
Boeing handed over a total of 20 jetliners in October, down from
57 in the same month last year. Without the MAX jet, the company is
on track to end 2019 with around 400 jetliner deliveries, half of
last year's total.
The total through October was 321 jets, compared with 625 in the
same period in 2018. The final tally hinges on whether MAX
deliveries resume by year end.
Boeing did secure orders for nine more wide-body jets in
October, including two 777 freighters from Deutsche Lufthansa AG
and the five 787s from Air Lease. An unidentified customer is
buying two 787s that were previously ordered by Boeing's finance
arm.
In total, 21 orders were removed from the books last month,
taking Boeing's year-to-date net orders after cancellations and
conversions to 45.
Rival Airbus SE delivered 77 jets last month, and though it cut
its own full-year guidance because of production problems, The
European plane maker is bound to overtake Boeing this year by
handing over 860 aircraft.
--Benjamin Katz contributed to this article.
Write to Doug Cameron at doug.cameron@wsj.com
(END) Dow Jones Newswires
November 12, 2019 14:48 ET (19:48 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
Boeing (NYSE:BA)
Historical Stock Chart
From Mar 2024 to Apr 2024
Boeing (NYSE:BA)
Historical Stock Chart
From Apr 2023 to Apr 2024