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Boeing’s Third-Quarter Deliveries Fall as Airlines Trim Fleets

Madhu Unnikrishnan

October 14th, 2020

What a difference a year makes. Boeing’s third-quarter commercial aircraft deliveries plummeted by more than half and by two-thirds for the year to date, as airlines defer aircraft and rework their order books to reflect a collapse in air travel demand.

Boeing delivered 28 commercial aircraft in the third quarter, mainly B787-family aircraft (13). Only low single digits of the other aircraft families were delivered: B737s (3); B747s (1); B767s (6); and B777s (5). For the year so far, Boeing delivered 98 commercial aircraft.

Compare this with last year’s third-quarter delivery report. Boeing delivered 62 aircraft then: B737s (5); B747s (1); B767s (10); B777s (11). Once again, B787-family aircraft comprised the bulk of the delivery book, at 35. For the year through the third quarter, Boeing delivered 301 aircraft, including 118 B737-family aircraft and 113 B787-family planes.

The 2019 numbers reveal a few things. One is that the B737 order book still was robust for part of the year, before the B737 MAX was grounded last March in the wake of two fatal accidents. The MAX still is grounded, but re-certification by the end of the year looks likely. Once the aircraft re-certified, Boeing will begin delivering the B737 MAXs it has already built but not delivered. Second, the demand for B787-family aircraft remained strong. And third, even before the airframer announced earlier this year it would end B747 production, the 2019 numbers revealed that few airlines were ordering the type.

The 2020 numbers, however you slice them, are grim. Airlines are reshuffling their order books as they face years of depressed demand. They simply don’t need as many aircraft as they did. Just yesterday, on its third-quarter earnings call, Delta said it would trim as many as 400 aircraft from its fleet between now and 2025. Boeing itself revised its 10-year commercial market outlook downward, now saying the world’s airlines will need 11% fewer aircraft than it had forecast in its 2019 outlook. It’s not just Boeing. Airbus has said it will cut 15,000 jobs as demand falls for its aircraft.

There’s been a lot going on at Boeing in the last few months. The company is ending the production of the B747. It’s consolidating B787 production in South Carolina, closing the line in Washington. And the MAX re-certification process looks promising.

It remains to be seen if Boeing’s grim delivery numbers will continue to slide downward. Some lessors and analysts believe orders will tick back up as airlines figure out their fleet needs. Most airlines are parking aircraft, but they may also replace older, less fuel-efficient aircraft with newer types. That process will shake out over the next few quarters.

“We continue to work closely with our customers around the globe, understanding their near-term and longer term fleet needs, aligning supply and demand while navigating the significant impact this global pandemic continues to have on our industry,” said Greg Smith, Boeing chief financial officer. “We’re taking actions to resize, reshape and transform our business to preserve liquidity, adapt to the new market reality and ensure that we deliver the highest standards of safety and quality as we position our company to be more resilient for the long term. “

Madhu Unnikrishnan

October 14th, 2020

Photo credit:  Boeing

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