Boeing’s July Could Have Been Better

Boeing collected no orders and saw cancellations for another 43 of its 737 Max jets during July, bringing its net order deficit for the year to 366, the company said on August 11. Of the 43 cancellations during the month, 20 came from Kuwaiti lessor Alafco and 15 from Dublin, Ireland-based AerCap as previously announced, while five newly revealed cancellations came from Canada Jetlines, two came from Dublin-based lessor Avolon, and one came from a private BBJ customer.

Boeing also removed nine 737 Maxes from its backlog as a result of ASC 606 accounting adjustments, which occur when the company no longer expects to deliver the airplanes due to extenuating circumstances such as a customer’s deteriorating financial condition.

“Although we are starting to see air traffic recover in some markets, the aviation industry continues to grapple with the impact of the virus,” a Boeing spokesperson told  BJT sister publication AIN. “We continue to work closely with our customers as they evaluate and adjust their fleet requirements in these unprecedented conditions. So you’ll see these challenges reflected in July orders and deliveries.”

During the month Boeing delivered four airplanes: a single 767 Freighter to FedEx, a 777 Freighter to DHL, and two 787-9s—one to Air France and the other to Turkish Airlines.

For the year, gross orders stand at 59, while the order deficit resulting from cancellations and conversions rose from 323 to 366. Including ASC 606 adjustments, the net order deficit rose from 784 to 836 for the year.

Boeing’s total order backlog fell from 4,522 to 4,496, reflecting the 43 cancellations, the nine-aircraft ASC 606 adjustment, and the four deliveries. As of July 31, the company had delivered 74 airplanes for the year.

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Boeing acknowledged the delivery total of four for July resulted from three primary factors, two of which relate to COVID-19. Aircraft deferrals due to customer desire to preserve cash accounted for much of the decline from previous months, as did COVID-related travel restrictions imposed on customers who otherwise would have taken delivery. Finally, shifts in production timing due to factors such as parts shortages delayed a few deliveries.