Boeing aircraft orders slump to lowest in decades
Grounding of 737 MAX also hits deliveries and cashflow
Boeing 737 MAX aircraft at Moses Lake, Washington. Analysts estimate Boeing has been losing about $1bn a month because of the grounding. Photograph: Lindsey Wasson/Reuters
Boeing reported its worst annual net orders in decades on Tuesday, along with its lowest numbers for plane deliveries in 11 years, as the grounding of its 737 Max jet saw it fall far behind main competitor Airbus.
Allowing for cancellations and changes to earlier orders, Boeing said it had received just 54 new orders for planes in 2019 and delivered less than half as many as a year earlier, losing the top spot to its European rival for the first time in eight years.
Boeing said unidentified customers cancelled orders for three 787-9s in December and another customer cancelled an order for a 787-8.
Ten months after the MAX was grounded following a pair of fatal crashes linked to its MCAS anti-stall system, Boeing still has a backlog of more than 5,400 orders for its long- and short-distance commercial jets.
By comparison, Airbus said earlier this month it racked up a net 768 orders last year after cancellations and delivered a record 863 planes.
The aviation industry is seeing a slowdown in orders, as fears of an economic downturn linger and global economies slow amid an ongoing US-China trade war.
Boeing said on Tuesday that deliveries fell by 53 per cent to 380 planes over the whole of last year, as the MAX’s grounding made it impossible for it to deliver the planes to airline customers, forcing it to halt production earlier this month.
Planemakers receive most of their revenue when aircraft are delivered – minus accumulated progress payments – making final delivery crucial for their finances.
Analysts estimate that Boeing has been losing about $1 billion a month because of the grounding and it reported an almost $3 billion negative free cash flow in the third quarter. Fourth-quarter figures are due on January 29th.
Boeing parted ways with chief executive Dennis Muilenburg last month as it became increasingly clear that he was making little headway in resolving the crisis.
The company is still working to fix the MAX and there is little clarity on when it is likely to get the green light from regulators to bring it back into service, making analysts and investors jittery about its prospects in 2020. – Reuters