Boeing got hit with a new wave of canceled plane orders
The company reported Tuesday that 60 orders were canceled in June, mostly by aircraft leasing companies.
Fortunately for Boeing it still has more than 4,500 jets in its backlog, enough to keep its factories working for years to come. But the June results mean Boeing has 843 canceled or uncertain orders in 2020, compared to only 59 new orders.
Deliveries are important because most of the money that Boeing gets for building a jet comes at the time of delivery. But its deliveries in the second quarter fell to 20, down from 50 in the first quarter and 90 in the second quarter of 2019.
The 20 jets delivered represented the lowest number of commercial airplanes delivered in a quarter by Boeing since 1977.
“Our commercial airplane deliveries in the second quarter reflect the significant impacts of the Covid-19 pandemic on our customers and our operations that included a shutdown of our commercial airplane production for several weeks,” said Boeing CFO Greg Smith. “We have and will continue to work with our customers on specific timing and adjustment to deliveries.”
“We continue to closely monitor the commercial marketplace by staying very engaged with our customers around the globe to fully understand short term and long term requirements,” he added.
Most of the 10 jets delivered in June were either freighters or an earlier version of the 737 that is sold to military customers.
Given the low demand for air travel during the pandemic, passenger airlines have little need or desire to accept delivery of jets. Only about 60% of the roughly 20,600 jets in global fleets are now in service, according to travel and analytics expert Cirium.