Boeing’s net orders slump to lowest in decades

Boeing Co reported its worst annual net orders in decades on Tuesday, along with its lowest numbers for plane deliveries in 11 years. The grounding of its 737 MAX jet saw it fall far behind main competitor Airbus.

Allowing for cancellations and changes to earlier orders, Boeing said it had received just 54 new orders for planes in 2019 and delivered less than half as many as a year earlier. The drop in orders means the United States-based company has lost the top spot to its European rival for the first time in eight years.

Boeing said unidentified customers cancelled orders for three 787-9 planes in December, and another customer cancelled an order for a 787-8.

Ten months after the 737 MAX was grounded following a pair of fatal crashes linked to its MCAS anti-stall system, Boeing still has a backlog of more than 5,400 orders for its long- and short-distance commercial jets.

By comparison, Airbus said earlier this month that it racked up a net 768 orders last year after cancellations and delivered a record 863 planes.

The aviation industry is seeing a slowdown in orders as fears of an economic downturn linger and global economies slow amid an ongoing US-China trade war.

Boeing said on Tuesday that its deliveries fell by 53 percent to 380 planes over the whole of last year. The 737 MAX’s grounding made it impossible for it to deliver the planes to airline customers and forced it to halt production earlier this month.

Planemakers receive most of their revenue when aircraft are delivered – minus accumulated progress payments. Final delivery is, therefore, crucial to their finances.

Analysts estimate that Boeing has been losing around $1bn a month because of the grounding, and the company reported an almost $3bn negative free cash flow in the third quarter. Fourth-quarter figures are due on January 29.

Boeing parted ways with Chief Executive Officer Dennis Muilenburg last month as it became increasingly clear that he was making little headway in resolving the crisis.

The company is still working to fix the 737 MAX, and there is little clarity on when it is likely to get the green light from regulators to bring it back into service, making analysts and investors jittery about its prospects in 2020.