May 14, 2019 / 3:13 PM / 2 months ago

Boeing deliveries hammered by 737 MAX groundings

(Reuters) - Boeing Co handed over 24 percent fewer jet airplanes in the first four months of 2019 compared with the same period a year earlier as the grounding of its top-selling 737 MAX aircraft halted deliveries for a second month.

FILE PHOTO: FILE PHOTO: A 737 Max aircraft is pictured at the Boeing factory in Renton, Washington, U.S., March 27, 2019. REUTERS/Lindsey Wasson/File Photo

As expected, the company took no new orders in April for the narrowbody jets as it continues to work on a software fix for the plane’s anti-stall system MCAS.

Deliveries of the aircraft were stopped in early March, a few days after an Ethiopian Airlines plane crashed, killing all 157 people on board, in the second fatal accident involving the 737 MAX in just five months.

Last month Boeing abandoned its 2019 financial outlook, halted share buybacks and said lowered production of the fastest-selling 737 MAX jets in the wake of the groundings had cost it at least $1 billion.

Boeing recognizes full payment for planes when they are handed over to customers, and the formal grounding of the 737 MAX in almost all global airspace has completely halted deliveries.

At the end of March, Boeing had 91 net orders, but the company’s leasing and lending services unit Boeing Capital moved four of its 737 MAX delivery slots to a lessor.

That led to the company recording 87 net orders through April across its aircraft lineup, a reduction of four on a net basis.

Boeing had also removed 206 planes from its order backlog last month due to the near-collapse of India’s Jet Airways.

As a result, its net orders for the first four months slid into negative territory, with a total of minus 119 net orders after cancellations, despite a slew of new wide-body sales.

The adjustment has pushed the world’s largest planemaker behind European rival Airbus SE in the race for business this year as both companies grapple with cancellations that outweigh new orders.

Airbus last week said it had won 67 gross orders through April this year, but 125 cancellations left it with a negative net order of 58 aircraft.

Airbus delivered 232 aircraft in the first four months of 2019, up from 172 planes a year earlier.

Boeing’s total deliveries fell to 172 planes in the same period, compared with 228 jets in 2018.

Investors and analysts closely watch the number of planes Boeing turns over to airlines and leasing firms for cues on the company’s cashflow and revenues.

Boeing shares were up 2 percent - in line with the broader market, a day after fears of renewed trade tensions between the United States and China led to a drastic selloff.

Reporting by Ankit Ajmera and Rachit Vats in Bengaluru; Editing by Saumyadeb Chakrabarty

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