April 14, 2020 / 3:10 PM / a month ago

Boeing 737 MAX cancellations pile up during production halt

(Reuters) - Boeing Co (BA.N) on Tuesday reported another 75 cancellations for its 737 MAX jetliner in March, as the coronavirus crisis worsened disruptions from the grounding of its best-selling jet.

FILE PHOTO: Unpainted Boeing 737 MAX aircraft are seen parked in an aerial photo at Renton Municipal Airport near the Boeing Renton facility in Renton, Washington, U.S. July 1, 2019. Picture taken July 1, 2019. REUTERS/Lindsey Wasson

The U.S. planemaker posted a total of 150 MAX cancellations in March, including 75 previously reported from Irish leasing company Avolon. New cancellations came from buyers including 34 of 135 aircraft ordered by Brazil’s GOL (GOLL4.SA).

GOL confirmed the 34 cancelled planes and said it reached agreement with Boeing on “cash compensation and changes to future orders and associated payment schedules.”

“GOL remains fully committed to the 737 MAX as the core of its fleet and this agreement further enhances our successful long-term partnership with Boeing,” said GOL chief executive Paulo Kakinoff in a statement. GOL now has 95 remaining firm orders for 737 MAX aircraft.

The cancellations come as Boeing seeks to untangle delivery commitments after halting output of the MAX in January, following delays in returning it to service.

Boeing shares closed down 4.3% to $141.00, off $6.33.

Boeing, facing a 13-month-old freeze on deliveries of the MAX and now disruption to deliveries of larger planes due to the coronavirus epidemic, said it had delivered 50 planes in the first quarter, barely a third of the 149 seen a year earlier.

That was the lowest since 1984 for the first quarter.

The company posted orders in March for 12 787 Dreamliners, one 767 freighter and 18 pre-MAX versions of the 737 for the P-8 maritime patrol program. For the first quarter, it posted 49 new orders, or a negative total of 147 after cancellations.

After further accounting adjustments representing jets ordered in previous years but now unlikely to be delivered, Boeing’s adjusted net orders sank to a negative 307 airplanes.

The pandemic has forced Boeing and European rival Airbus (AIR.PA) to cut production in the face of plunging demand, cash problems at airlines and logistical difficulties in delivering aircraft.

Boeing remains in talks with regulators seeking approval to return the plane to service. Last week, Boeing said it was addressing two new software issues with the MAX flight control computer.

Major U.S. airlines, suffering an unprecedented downturn in demand due to the coronavirus, on Wednesday said they agreed in principle on the terms of $25 billion U.S. government payroll aid.

Reporting by Rachit Vats, David Shepardson and Tim Hepher; Editing by Maju Samuel and Sonya Hepinstall

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