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Boeing Continues to Tumble Amid Coronavirus Pandemic
Boeing lost 150 orders for its 737 MAX aircraft in March, the carrier announced on Tuesday. The drastic fall in orders comes as airlines continue to suffer, some completely halting flights as worldwide demand approaches zero.
Now more than a year into its grounding after a March 2019 crash — its second major fatality-ridden accident — the MAX is on especially thin ice. Boeing claimed to be on a steady pace to get the MAX jet back into the skies in the second or third quarter of this year, but recent events around the world and in the industry have quickly halted those plans.
According to delivery data released Tuesday, the manufacturer gave customers the keys for 50 aircraft in the first quarter of this year. Contrast that with the same period a year prior, when the manufacturing powerhouse delivered 149 commercial aircraft to customers, including 89 Boeing 737 aircraft. From January to March this year, that number was just five.
Further still, the coronavirus only began to have drastic effects on the aviation industry in the second half of the quarter, crippling much of Europe and North America in March. Depending on how long the effects of the virus drag on, the second, third and fourth quarters have the potential to be far worse for the already beleaguered manufacturer.
Even when travel restrictions and shelter-in-place orders across the world are lifted, however, Boeing likely will not see its demand spring back to its usual levels immediately. Major airlines around the world have grounded nearly 50 percent of their total fleet, with some halting operations altogether. It will likely take at least months before all of the grounded aircraft are back in the skies, and much longer before airlines truly have a need for new aircraft, as, in many regions, commercial traffic is down over 90 percent.
“The airline industry is confronting the COVID-19 pandemic and the unprecedented impacts on air travel,” Boeing said in a statement to the Washington Post. “We are working closely with our customers, many of whom are facing significant financial pressures, to review their fleet plans and make adjustments where appropriate.”
While airlines began to announce the aid packages they would receive from the Department of the Treasury on Tuesday, how Boeing will be supported is not yet known. President Donald Trump has explicitly stated his desire to help the struggling company — which at its peak operating power has comprised approximately 0.5 percent of the U.S.’s gross domestic product — but the company’s bailout package would be separate from airlines’.
Boeing itself has asked for $60 billion in aid from the U.S. government in order to remain afloat in the weeks and months to come, saying at the time, “This will be one of the most important ways for airlines, airports, suppliers and manufacturers to bridge to recovery. Funds would support the health of the broader aviation industry because much of any liquidity support to Boeing will be used for payments to suppliers to maintain the health of the supply chain.”
Boeing’s largest competitor, Toulouse, France-based Airbus, announced last week a total of 122 commercial aircraft deliveries and 290 net deliveries — the difference between deliveries and cancelations. While the company did see a slowdown in March, it produced 60 aircraft that “remain undelivered due to the evolving COVID-19 pandemic.” The manufacturer has cut its production rate around 30 percent going forward.
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