By Doug Cameron and Benjamin Katz
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (January 15, 2020).
Boeing Co. said deliveries and new orders for its jetliners hit
their lowest point in more than a decade as the global grounding of
the 737 MAX undermined the aerospace giant's business.
The U.S. plane maker in 2019 handed over 380 aircraft, including
military versions of its jetliners, a 14-year-low that compares
with a record 863 deliveries by European rival Airbus SE. Boeing
delivered 806 planes in 2018, a high for the company.
The Chicago-based company last year brought in new orders for
246 commercial jets of all types, its lowest tally before
cancellations and model swaps since 2003.
Boeing's order count has suffered from a two-year drought from
China customers, which historically has accounted for a quarter of
deliveries. The U.S. is due to unveil an initial trade deal
Wednesday that President Trump -- in a tweet -- has said could
unlock $20 billion in aircraft orders.
Boeing declined comment, but previously said that orders could
be depressed by the trade spat and China's latest aircraft plans.
Chinese carriers order most of their planes via a central
government system, though they have continued to take Boeing jets
from leasing companies.
Boeing and Airbus have enjoyed a two-decade duopoly that is now
out of kilter because of the MAX's grounding last year. Airbus
first overtook Boeing in annual orders in 1999 and by deliveries
three years later. The duo have traded top spots regularly since
then.
Shares of Boeing edged higher after its report Tuesday, as the
company handed over more 787 Dreamliners -- its biggest source of
cash with the MAX grounded -- and deliveries of military jets and
helicopters more than doubled from a year earlier. Airbus shares
also gained less than 1%.
The record 45 Boeing 787s delivered in the fourth quarter, along
with other widebody jets, could add $1.5 billion to current sales
estimates, said analyst Cai von Rumohr at Cowen.
Order cancellations climbed for both Boeing and Airbus in 2019,
especially for larger widebodies as airline traffic growth has
slowed and carriers in some emerging markets have been buffeted by
competition and volatile exchange rates.
A record number of airline collapses last year idled more than
400 planes around the world, though most were returned to work to
help fill the void left by the MAX's grounding.
"We will see some more failures," said Stuart Hatcher, chief
operating officer at IBA Group Ltd, a U.K.-based specialist in
aircraft values and repossessions.
The uncertainty over when the MAX might return continued as
American Airlines Group Inc. said Tuesday that it would remove the
plane from its schedules until June, two months longer than
previously planned. Carriers are adjusting to the prospect that
regulators may require pilots to go through costly and
time-consuming simulator training before flying the plane
again.
Boeing said it delivered 35 jets in December, its highest count
since March, when the MAX was grounded by regulators in the wake of
two fatal crashes, forcing the company to suspend deliveries of the
aircraft.
The company still has orders for around 4,500 of the planes, but
has halted production because of uncertainty over when the MAX
might resume flying and the risk of airlines and leasing companies
canceling existing deals.
Leasing companies account for more than 40% of the MAX order
book, and even before the aircraft's grounding they were struggling
to place the jets with carriers.
Airbus's record delivery tally for 2019 still fell short of the
company's original target because of production setbacks. Guillaume
Faury, who took the helm at Airbus in April, has had to hold back
on boosting its A320 production target by 10% to about 70 aircraft
a month. The narrowbody jet, Airbus's rival to the Boeing 737
family, is currently sold out until late 2024.
Cancellations at Airbus came from its decision to scrap its A380
superjumbo and from a slew of cutbacks at embattled carriers. The
A380 cuts were led by Emirates, by far the double-decker's biggest
operator, while Abu Dhabi-based Etihad and Hong Kong Airlines, both
cut orders for the smaller A350.
Avianca slashed its Airbus order book by 10 A350s and 62
A320neos in December, and the bankruptcy of Berlin-based Germania
lost the plane maker an order for 25 narrowbodies earlier in the
year.
Despite its production constraints, Airbus brought in 1,131
orders last year for a net total of 768 -- slightly more than in
2018. The new orders were boosted by the launch of a A320 variant
that boasts more range. The bigger A321 XLR has been eating into
the potential market that Boeing envisions for its first all-new
aircraft model in a decade.
Boeing's 246 new-order tally last year included deals for 113 of
its 787s and 38 of the widebody 777. The new 777X, which has been
delayed by design and production problems, secured no new
orders.
Write to Doug Cameron at doug.cameron@wsj.com and Benjamin Katz
at ben.katz@wsj.com
(END) Dow Jones Newswires
January 15, 2020 02:47 ET (07:47 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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