Boeing’s sales have taken a huge hit from the 737 Max crisis

Posted at 9:54 AM, Jul 09, 2019
and last updated 2019-07-09 13:47:16-04

Boeing reported orders for only 13 commercial jets last quarter — the latest sign that the 737 Max crisis has hurt demand for its planes.

That figure marks a steep drop-off compared to the same time period a year ago, when Boeing reported 277 orders. And the small number reflects how few jets Boeing has sold so far in 2019. Through the first half of 2018, Boeing recorded 453 jet orders. This year, it has recorded 108, mostly from sales that took place before the 737 Max crisis began.

Boeing sales have nearly come to a halt since the grounding in March of the 737 Max, which is its best-selling jet. That month, one of the jets crashed in Ethiopia and killed all 157 people on board. It was the second fatal crash of a 737 Max in months.

It is not known when Boeing will get approval from the Federal Aviation Administration and other aviation authorities for the planes to fly again. That approval might not come until near the end of this year at the earliest.

Plane deliveries were also sharply lower in the second quarter. Boeing delivered just 90 jets, slightly less than half of the 194 it delivered a year ago. Deliveries are important because the majority of the revenue that Boeing records on a sale comes after the jet makes its way to the customer.

Boeing halted deliveries of the 737 Max immediately after the grounding, though it continues to build them. The company has a backlog of about 4,000 of the jets, which have already been ordered.

That backlog is another reason why sales have been slow since the crash in March. Most of the airlines that intend to buy the jets have already placed their orders.

Boeing has picked some some business since then for its troubled jet. At the Paris Air Show last month, International Airlines Group announced a letter of intent to buy 200 of the 737 Max planes. IAG owns Aer Lingus, British Airways, Iberia and other European carriers. But that was not recorded as a firm order, so it does not show up in the June sales figures.

On Sunday, the Saudi Arabian airline flyadeal reversed plans to buy up to 50 of the 737 Max jets. The company didn’t mention Boeing in its announcement, but said it was ordering up to 50 planes from Boeing rival Airbus.

But like the IAG news that announcement was not a firm order. So the loss of that sale was not reflected in the most recent Boeing sales numbers.

Airbus recently announced its own sales figures. The rival plane maker recorded 213 orders in the first half of 2019, about double what Boeing reported.