Boeing customers cancel orders for 150 jets in March

The canceled orders were all for the 737 Max jets, the single aisle passenger plane that has been grounded since March 2019 in the wake of two fatal crashes that killed 346 people. Boeing has been struggling to find a fix for the safety system blamed for the crashes. But despite those troubles, the company suffered only a modest number of canceled orders until the coronavirus started decimating air travel earlier this year.

Boeing (BA) had already reported 43 canceled orders in February for the jet, and Irish aircraft leasing firm Avalon had announced it was canceling orders of 75 additional 737 Max jets earlier this month that are included in the 150 cancellations announced by Boeing Tuesday.

Another 34 orders were canceled in March by Brazilian airline GOL, which previously had unfilled orders for 129 of the jets. Lufthansa subsidiary SmartWings canceled five orders as the German airline recently announced plans to scale back its operations even after the crisis has passed. Boeing did not identify which airlines or leasing companies had canceled the other 36 jet orders.

“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,” Boeing said in a statement.

With the unprecedented drop in air travel and a record number of jets parked around the globe, the huge number of canceled orders was not a surprise said Richard Aboulafia, aerospace analyst for the Teal Group. He said this current crisis is far more serious for Boeing than were its earlier troubles getting approval for the 737 Max to fly again.

“Even these unpleasant numbers are kind of meaningless because the reality is much worse,” he said. Boeing still has a backlog of orders for thousands of jets it has yet to build, he added, and he expects it won’t lose most of those. But he said there is a larger risk that airlines will defer delivery of many of those jets until the market for travel improves, which will likely take years.

Boeing also changed how it accounts for the backlog in orders with its March report, suggesting that about 160 additional jets have already had their delivery schedule deferred further. The total number of commercial planes now in its backlog stands has therefore dropped by about 300 planes in the month, although it still stands at about 5,000.