Boeing Hasn’t Sold a Single 737 Max in 3 Months

Journalist:
David Hundeyin @DavidHundeyin
July 10, 2019

Plane manufacturer Boeing is stuck in market purgatory as its stock flounders in the wake of stubbornly low demand.

On Tuesday, the company reported that it had not received any new orders for its beleaguered 737 Max aircraft, making it the third straight month that the world’s largest airplane manufacturer had not sold a single one of what was once its best-selling jet.

Boeing Stock Sits on Sidelines of Market Rally

Boeing stock flatlined on the news, exiling BA shareholders to the sidelines amidst a broad stock market rally.

Boeing stock traded sideways on Wednesday, despite the Dow rising nearly 100 points. | Source: Yahoo Finance

While Boeing has reportedly fixed the software problem with the anti-stall system that caused the 737 Max air disasters, the planes remain grounded indefinitely.

More worrisome is that a poll conducted by the NPR showed that 60 percent of travelers said they would not fly on the 737 Max even if the current ban is lifted.

Boeing’s stock has been pummeled by the Max debacle, losing around $50 billion of its market value since March. BA shares currently trade at $353, placing its market cap just below $200 billion.

Boeing is reportedly negotiating a deal to sell 200 Max jets to the parent company of British Airways, but the order has not yet been finalized.

But even current orders are not necessarily safe. Just this week, Saudi airline Flyadeal pulled out of a $5.9 billion order it had already placed, opting instead for the 737 Max’s archenemy, the Airbus A320.

Market Waits to See What Happens Next

BA shares are struggling to tread water. | Source: Yahoo Finance

The aircraft manufacturing company has had to reduce the production rate of the plane to 42 per month instead of the projected 57 it had initially planned to achieve. There is also a long backlog of around 4,600 planes, which the company is expected to deliver before receiving payments.

With analysts not sure if the plane will be cleared to fly till the last quarter of the year and increasingly-dissatisfied airlines seeking compensation from the airplane manufacturer, it is looking to be a very long Q3 for Boeing.

Eternal rival Airbus, on the other hand, is capitalizing on Boeing’s woes to increase sales of its A320. Already, Airbus has delivered 389 planes in the first half of 2019 and plans to deliver 890 by the end of the year.

Tags: Boeing
David Hundeyin @DavidHundeyin

I am a busy Nigerian writer, journalist and writer with an interest in tech and finance. When I'm not contributing to CCN and traveling around Africa, you can catch me contributing to CNN Africa, or in the writers room at 'The Other News', Nigeria's weekly answer to 'The Daily Show' with nearly 2 million viewers. My work on 'The Other News' was featured in the New Yorker Magazine, and that was then cited in the Washington Post so I'm not sure that counts as a feature but I'll definitely mention it too! I have been nominated by the US State Department to take part in the 2019 Edward R. Murrow Program for journalists under the International Visitors Leadership Program. I also like hamsters. You can reach me on Twitter at _David_Hundeyin