Boeing Books No New Jetliner Orders in January

By Doug Cameron 

Boeing Co. said it booked no new jetliner orders in January, increasing the financial strain that has been building during the 737 MAX crisis as airlines added no new deposits to secure a place in the plane maker's order backlog.

The aerospace giant delivered 13 planes last month, including six 787 Dreamliners, two 777s and military versions of its commercial jets. Boeing said no customers canceled orders, leaving its backlog for future production at 5,393 jets.

Deliveries, defense contracts and jetliner-service deals have become key items for investors because they provide much-needed cash to fill part of the gap from the prolonged grounding of the MAX and subsequent halt in production following two fatal crashes. Boeing has lined up a $13 billion bank loan to help fund compensation to MAX customers, as well as the cost of halting production.

A month without MAX order cancellations -- airlines dropped deals for around 200 of the jets last year, including five in December -- is a welcome turn against a backdrop of weakening demand due to slowing airline traffic growth. The coronavirus outbreak in China could also weigh on demand from Asian carriers, people in the industry have said.

Airbus booked a record 274 net new orders in January and delivered 31 jets. The European plane maker on Tuesday said it has secured permission from Chinese authorities to restart assembly of A320 jets at a plant in Tianjin.

Production had been halted there as part of broader travel restrictions imposed to limit the spread of the virus, which also dented attendance and dealmaking at the biennial Singapore Airshow that started this week. Dozens of aerospace and defense companies canceled their attendance at the show, likely curtailing the order announcements often made there.

Boeing's January performance compared with 46 deliveries and 45 jet orders a year earlier. Deliveries last month included two KC-46A military refueling tankers to the U.S. Air Force, as well as P-8 Poseidons, a version of the 737NG converted for military surveillance.

The two planes received mixed backing in the fiscal 2021 budget request the Pentagon released on Monday. It is requesting $3 billion to buy 15 tankers, three more than approved by Congress last year.

The plane has been plagued by design problems that have delayed deliveries and left the Air Force unable to use some of its capabilities, prompting the government to withhold some payments to Boeing.

The Pentagon said it believes the plane will be fixed and wants to accelerate the retirement of older tankers to save on maintenance costs and pay for new Boeing planes.

Boeing is the world's second-largest defense contractor by sales after Lockheed Martin Corp. After winning a string of new Pentagon contracts in 2018, the company pulled out of a contest to replace the U.S. arsenal of Minutemen ballistic nuclear missiles. That leaves Northrop Grumman Corp. as the sole bidder, and the Pentagon requested a tripling of funding for the program to $1.5 billion in fiscal 2021.

Write to Doug Cameron at [e-mail]

(END) Dow Jones Newswires

February 11, 2020 11:14 ET (16:14 GMT)

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