Boeing loses more 737 MAX orders, eyes US return but Europe tariffs loom

Boeing loses more 737 MAX orders, eyes US return but Europe tariffs loom
Boeing loses more 737 MAX orders, eyes US return but Europe tariffs loom

Boeing Co lost another 12 orders for its grounded 737 MAX jetliner in October, and delivered 13 aircraft to customers, down from the 20 jets delivered in the same month a year ago, company data showed on Tuesday.

For the second straight month, the closely watched monthly snapshot revealed 787 Dreamliner quality flaws and the coronavirus pandemic kept hampering Boeing’s efforts to develop an alternative cash cow to the 737 MAX.

The U.S. Federal Aviation Administration (FAA) appeared about a week away from lifting a March 2019 safety ban, although the pandemic kept hammering demand for jets from Boeing and European rival Airbus.

Airbus sold 11 jets last month and booked 72 jet deliveries, easing concerns over a cash-depleting overhang of unwanted jets.

The European Union’s decision to impose tariffs of 15% on Boeing planes this week could hobble its jet deliveries in Europe.

Boeing said it lost orders for four 737 MAX jets from China Development Bank Financial Leasing Co, one from Czech Airlines owner Smartwings, three from Oman Air, and four from an undisclosed buyer or buyers.

Canceled MAX orders, including those where buyers converted to a different model, was 448 jets – and 460 for all jets across Boeing’s portfolio, Boeing said.

For 2020 through October, the number of MAX orders canceled, or removed from Boeing’s official backlog when it applies stricter accounting standards, stood at 1,043 aircraft.

For deliveries – a key metric since customers hand over most of the money at the time they pick up new aircraft – Boeing handed over 13 twin-aisle jets in October, compared to 20 a year earlier and 10 in September.

That brings total deliveries to 111 aircraft in the 10 months through October 2020, down from 321 for the same period a year ago.

The October delivery tally included one P-8 maritime patrol aircraft, one 747 and three 767 freighters to United Parcel Service, two 777 freighters to China Cargo Airlines, one 777 to German logistics company DHL, and one 777-300ER to Dubai-headquartered Novus Aviation Capital, Boeing said.

Boeing also delivered four 787s in October: one 787-8 to American Airlines, one 787-9 to Leasing giant AerCap, one 787-10 to Abu Dhabi’s Etihad Airways, and one 787-10 Saudi Arabian Airlines.

Boeing stripped 51 737 Max aircraft from its backlog in September and received no commercial aircraft orders in the month, partly reflecting the coronavirus pandemic’s continued impact on new aircraft demand. In addition, the Chicago-headquartered airframer delivered 11 jets during the period.

Year to date, excluding deliveries, Boeing has removed 1,041 jets from its backlog, including 1,006 737 Max. It has received 67 orders for new aircraft this year.

The 51 Max deleted from the backlog include three cancellations: two from lessor BOC Aviation and one from an undisclosed customer.


Boeing delivered six 787-9s during September

An additional 48 jets were removed to align with accounting standards. Although Boeing still holds firm contractual orders for those aircraft, it has less confidence the sales will close.

Boeing says backlog adjustments reflect the “unprecedented impact” of the coronavirus-led industry downturn. Related travel restrictions have both hampered demand for new jets and made delivering aircraft challenging, the company adds.

Boeing also says the cancellations will help maintain aircraft values and “provide Boeing with more flexibility to address the 737 Max-family backlog”.

Cancellations enable the company to shuffle delivery schedules, helping ensure it can deliver Max jets as quickly as possible to other customers once regulators lift the type’s grounding.

Lessors have accounted for an outsized share of Max cancellations this year, though Boeing notes it still holds orders for some 900 Max jets from the sector.

“We continue to work closely with our customers around the globe, understanding their near-term and longer-term fleet needs, aligning supply and demand while navigating the significant impact this global pandemic continues to have on our industry,” says Boeing executive vice-president of enterprise operations and chief financial officer Greg Smith.

A decline on the 13 jets handed over in August, September’s 11 deliveries comprised one 737NG – a military P-8 variant – one 747-8 Freighter, one 767F, one 777F, and seven 787s.

The 787s included six -9s – one to lessor AerCap, three to United Airlines, and a pair to Turkish Airlines – plus a single -10 to Eva Air. UPS took the one 747-8F, FedEx the 767F, and Lufthansa Cargo received the 777F.

September’s Dreamliner deliveries marked a bump from previous months: Boeing delivered four 787s in August and just two in July. The company has been accumulated a stockpile of completed but undelivered 787s, with the figure standing at 44 jets on 1 October, according to Cirium fleets data.

Boeing’s 787 delivery pace has also been impacted by required inspections, the company says. In September, Boeing said it had identified an issue related to shims in the type’s vertical stabilisers.

In the year to date, Boeing has delivered 98 jets: 12 737s, two 747s, 20 767s, 15 777 and 49 787s.

September’s changes bring Boeing’s order backlog to 4,325 jets, down from 4,387 at the end of August. That includes 3,403 737s, 11 747s, 83 767s, 353 777s and 475 787s, data shows.