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2020-08-14 09:30

In a recent announcement, Boeing Co. (NYSE: BA) revealed that once its most-popular, 737 MAX jetliner, saw another 43 orders cancelled in July. In total, the U.S. airplane manufacturer has now faced 398 cancellations on its grounded aircraft this year.

Things haven’t been too encouraging for Boeing in the league of its other aircraft either, which it said, it only delivered four of, in July. These include one each of Boeing’s 777 and 767 airliners and two of its 787 Dreamliners. In comparison, it had delivered a total of 19 planes last year in July. The planemaker’s total deliveries year to date now stand at 74. Boeing is expected to see a massive drop in deliveries this year after delivering a total of 380 aircraft in 2019 and a historically high 806 planes in 2018.

Cancelled deliveries are weighing heavily on Boeing’s revenue
Boeing’s 737 MAX was grounded last year in March after two fatal crashes in the short span of 5 months that took 346 lives in total. As per a stricter accounting standard, order cancellations for 737 MAX, as per Boeing, currently stand at 857. Since airlines traditionally make the majority of payment after delivery, the reduced number is weighing heavily on Boeing’s revenue.

While American Airlines brought two of its 737 MAX airliners from Roswell International Air Center’s storage facility to its maintenance facilities located in Tulsa, the broader return of the aircraft for commercial flights is still hanging after over a year of scrutiny from the U.S. Federal Aviation Administration (FAA). British Airlines, one of Boeing’s largest customers, also announced to have retired its entire fleet of Boeing 747 in July.

Boeing also highlighted this week that it did not secure any new orders last month. New cancellations of 737 MAX orders in July included Canada Jetlines that scrapped five orders and Avolon that cancelled two. One of Boeing’s business jet customers also withdrew its order last month.

Jefferies forecasts Boeing to deliver 138 aircraft in total this year
On an adjusted basis, Boeing says it has lost 836 orders in total in 2020 so far. According to brokerage Jefferies, the American multinational corporation’s deliveries are expected to remain capped at 138 aircraft this year. Boeing published its financial results for the fiscal second quarter on July 29th, that highlighted its net loss to have contracted to $2.42 billion. It reported a negative free cash flow of $5.69 billion in its Q2 earnings report.

Shares of the company opened at $172 per share on Monday. After briefly touching a weekly high of $189 per share on Tuesday, it is currently exchanging hands at $175 per share that marks an over 45% decline on a year to date basis. The stock had dropped to as low as $95 per share in March when COVID-19 wreaked havoc on the global travel and tourism industry.

In comparison, Boeing’s performance in the stock market last year was also marginally upbeat with an annual gain of roughly 4%. At the time of writing, the Chicago-based airplane manufacturer has a market cap of $98.63 billion.