BA Boeing Co

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)

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