Boeing 737 MAX planes, the world’s most popular commercial jet, have been grounded worldwide since March after two crashes killed more than 300 people. Deliveries and new orders have collapsed since the planes were taken out of service.
Reuters reports Boeing delivered 258 737 MAXs in the first seven months of 2019, versus 417 last year, which accounts for a -38% reduction in deliveries, risks being displaced by European rival Airbus.
The aircraft has been grounded worldwide since mid-March following two crashes that killed 346 people. Aviation investigators determined that both planes had similar problems with an anti-stall system before impact. Boeing has been desperately trying to fix software related to the anti-stall system, but timelines of when the plane can return to service continue to get pushed back.
Boeing last month posted the largest-ever quarterly loss (nearly $3 billion — after taking a $4.9 billion after-tax charge for the expense of compensating airliners that use the planes), warning it could suspend production if the aircraft is not flying in the near term.
Already, production was slashed by 25% to 25 737 MAXs in April. The company was in the process of ramping output to 57 per month, but that has since been abandoned.
Boeing’s backlog of 737s is about 4,600; however, some potential clients have already switched to Airbus.
Aviation investigators identified a new problem with the 737 MAX in June has delayed its return to service to late Septemeber. Delays have disrupted airline carriers, losing hundreds of millions of dollars in lost service, many have demanded Boeing compensate for their loss, which is one of the reasons why the company just had the largest-ever quarterly loss.
Southwest is one carrier that has removed all 737 MAXs from its schedule until early 2020.
With delivers crashing in the first seven months, new orders have also plummeted 71% in the same period on a YoY basis.
Flyadeal, a budget carrier in Saudi Arabia, canceled its intent to purchase 50 737 MAX planes, switched last month to the Airbus neo.
Boeing, whose shares are in a bear market, down 24% in 115 days since the high in early March, could see a retest of the 300 level with no clear indication that the planes could be flying this year.
As of early August, 150 undelivered MAX planes sit at sites across the US, along with 380 that were grounded by regulators.
via ZeroHedge News https://ift.tt/2Kzo63l Tyler Durden