Boeing’s lost orders soar to 255 amid worsening year
Boeing’s net sales this year shrank by 255 jets through April as airlines shelved expansion plans and canceled orders for the grounded 737 Max amid a historic collapse in air travel.
The plane maker didn’t gain any new orders last month and delivered only six — four of them 787 Dreamliners, according to data posted on its website Tuesday. The number of sales lost this year reached 516 when including an accounting adjustment that assesses the financial health of customers and contractual details of orders.
Already in crisis because of the beleaguered Max, Boeing is now attempting to counteract the wide-ranging effects from the COVID-19 pandemic, such as parts shortages and plunging demand. Deliveries were disrupted when the company temporarily closed factories in Washington and South Carolina for several weeks as the illness spread among workers. Some overseas customers faced the additional hassle of quarantines for pilots who fly new jets home from the U.S.
“The outlook is increasingly negative” for Boeing as the impact from the outbreak flows through to results, analyst Sheila Kahyaoglu of Jefferies wrote in a report.
Few airlines are looking to add new aircraft when much of the global travel industry is fighting for survival. While Airbus also is being squeezed, the pressure is especially acute for Chicagobased Boeing, which is working with regulators to end a 14-month flying ban for the 737 Max after two fatal crashes. Buyers can typically opt out of a delivery that has been delayed for a year without facing penalties.
Customers in April canceled orders for 108 Max aircraft, Boeing’s workhorse jet and main source of revenue. Of those, 10 were scrapped by unidentified customers while 98 of the single-aisle planes were pared from orders by China Development Bank Financial Leasing and the aircraft leasing arm of General Electric. So far, airlines and lessors have ditched orders for 299 Max this year.
Airbus recorded 14 deliveries in April, 12 of them narrow-body jets, along with nine new sales. The Toulouse, France-based manufacturer has notched 299 orders net of cancellations this year.
Boeing has been renegotiating delivery schedules with lessors and airlines for the 737 Max as the company prepares to restart its assembly lines this month after a five-month hiatus. The plane maker has signaled that it would slowly step up production and sees delivering 450 of the aircraft built during the grounding as its top priority.