Boeing Loses Plane Orders as Coronavirus Hits Global Air Traffic
April 14 2020 - 11:29AM
Dow Jones News
By Doug Cameron
Boeing Co. said Tuesday that it removed more than 300 jetliners
from its order book in March as airlines start to adjust their
fleets to future demand in response to the coronavirus
pandemic.
Most of the cuts fell on the 737 MAX as customers canceled
orders for 150 jets and Boeing downgraded the status of some
existing deals because of airlines' weakening financial health.
Boeing and rival Airbus SE still have orders for almost 13,000
jets placed over the past few years and have already cut production
rates in response to the collapse in global airline traffic caused
by virus-related travel restrictions and the resultant economic
slowdown.
However, both plane makers are expected to suffer more
cancellations as some airlines are expected to collapse because of
a crisis that analysts expect to cost at least two or three years
of growth.
The International Air Transport Association on Tuesday forecast
global passenger numbers would fall 55% this year compared with
2019. The trade group's revised estimate includes a limited
recovery in some domestic markets starting in the third
quarter.
Boeing's MAX cancellations came from a variety of customers,
including 75 from lessor Avolon Holdings Ltd., 34 from Brazil's GOL
Linhas Aereas Inteligentes SA and five from Czech Republic-based
Smartwings.
The industry's deteriorating financial health led Boeing to
downgrade orders for another 163 jets, including 139 of its MAX
aircraft. It still has contracts to sell the planes, but they have
been removed from its firm backlog because of a reduced expectation
they will be delivered. It ended the quarter with 5,049 firm
orders.
The grounding of the MAX following two fatal crashes has left
Boeing reliant on its wide-body and military jets to generate cash,
and it handed over 20 planes in March. That is three more than in
February, taking the first quarter total to 50.
March deliveries included 11 787 Dreamliners, three 777s and two
767 freighters. It also handed over three KC-46A military tankers
and a P-8 surveillance jet to the U.S. Navy, which ordered 18 more
of the planes last month.
Boeing this week restarted limited production of the military
versions of its commercial jets at a facility near Seattle
following a temporary closure because of virus-related travel and
work restrictions in Washington state.
Production of commercial jetliners in the state and at a
separate facility in South Carolina remains shut down
indefinitely.
Boeing secured orders for 31 jets last month, more than half of
them from the Navy, with previously announced deals for a dozen
787s from All Nippon Airways' parent ANA Holdings Inc. and a single
767 freighter from FedEx Corp.
Airbus last week said it delivered 36 aircraft in March, down
from 55 in February. It booked net orders for 21 jets after 15
cancellations. The company said it would cut production rates by
about a third.
Write to Doug Cameron at doug.cameron@wsj.com
(END) Dow Jones Newswires
April 14, 2020 11:14 ET (15:14 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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