Skip to content

Boeing's bad quarter: Company delays 777X, 737 MAX timeline as COVID hits business

July 29, 2020
5 min read
Boeing's bad quarter: Company delays 777X, 737 MAX timeline as COVID hits business
This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.

Travelers looking forward to flying on Boeing's next wide-body jet will have to wait a little longer. The coronavirus pandemic that's wreaked havoc on the airline industry has also hit Boeing, affecting aircraft timelines across the planemaker's commercial jets division.

Chicago-based Boeing slid the introduction of the 777-9X, an updated and re-engined version of its venerable 777 wide-body, into 2022. The company cited the pandemic among a myriad of causes for the delay during its second-quarter earnings call Wednesday. The shift from 2021 was expected following comments by Emirates to Bloomberg earlier in July.

The 777X is not the only Boeing program delayed by COVID. The 737 MAX re-certification is also taking longer than it otherwise would have due to the virus. The expected return-to-service date is now in the fourth quarter pending regulator approval, the planemaker's CEO Dave Calhoun said Wednesday.

Sign up for the free daily TPG newsletter for more airline news!

The 777X landing after its first flight in January 2020. (Photo by Zach Wichter/The Points Guy.)

“The current challenges we have are of unprecedented proportion," Calhoun said, referring to the pandemic and the on-going grounding of its breadwinning 737 MAX family. The planemaker lost $2.4 billion during the second quarter, a period when it only delivered 20 planes from its commercial division and wracked up more cancellations than new orders.

Looking forward, Boeing said it is using the crisis to re-evaluate its production "footprint," including the possibility of consolidating 787 production in ether Everett, Washington, or North Charleston, South Carolina. This would allow it to reduce costs in a way that executives say it could not before the pandemic.

“I don’t want to predispose any answers… we’re taking a very serious effort," Calhoun said about speculation Boeing could move all Dreamliner production to South Carolina.

Related: Boeing’s 777X completes its maiden flight

Things may not get better for Boeing in the short term. Calhoun acknowledged that the resurgence of COVID infections in the U.S. since the end of June, as well as elsewhere around the globe, has delayed the recovery in air travel and thus the need by many airlines for new jets.

Sign up for our daily newsletter

Boeing is in talks with all of its customers about the status of their commitments, said Calhoun. This includes delays and re-timing of deliveries to outright cancellations. Aircraft leasing company AerCap, for example, said Wednesday that it had cancelled orders for 15 MAXes.

Against that backdrop, Boeing is cutting production rates. The 737 MAX will only resume to 31 aircraft a month by 2022; the 777 and 777X will drop to two planes a month from five next year; and the 787 will drop to six jets a month from 10 in 2021, pending a return in demand for wide-body long-haul aircraft.

Related: FAA move could have Boeing 737 MAX flying again this fall

Boeing can count five of the largest U.S. airlines among its customers: Alaska Airlines, American Airlines, Hawaiian Airlines, Southwest Airlines and United Airlines. All have outstanding orders for either 737 MAX or 787 jets and are working to restructure future deliveries as they manage through the crisis.

On Tuesday, Hawaiian CEO Peter Ingram said the airline has had "productive" talks with the planemaker regarding the status of its order for five 787-9 jets. The first aircraft are unlikely to arrive before 2022 or 2023, instead of next year, though nothing has been finalized, he said.

Gary Kelly, CEO of Dallas-based Southwest and also the largest global operator of 737s, stood by the MAX during the airline's own earnings call earlier in July. He called the carrier's all-737 fleet "more appropriate than ever for the current environment," and said the airline looks forward to returning the MAX to service before the end of the year.

But standing by the jet does not mean Southwest wants lots of them right away. The airline has already delayed 75 of the 123 MAXes it was scheduled to take through 2021, and executives now say that they may slow the remaining 48 deliveries even more.

Boeing plans to deliver all of the roughly 450 737 MAXes that it has in storage within a year of re-certification — or by the end of 2021 — said Calhoun.

Related: Global air travel unlikely to recover until 2024 as COVID remains ‘issue’ in US, elsewhere

Featured image by Photo by Zach Wichter/The Points Guy

Top offers from our partners

How we chose these cards

Our points-obsessed staff uses a plethora of credit cards on a daily basis. If anyone on our team wouldn’t recommend it to a friend or a family member, we wouldn’t recommend it on The Points Guy either. Our opinions are our own, and have not been reviewed, approved, or endorsed by our advertising partners.
See all best card offers

TPG featured card

Best card for premium perks while traveling
TPG Editor‘s Rating
Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
4 / 5
Go to review

Rewards

2 - 10X points
10XEarn unlimited 10X miles on hotels and rental cars booked through Capital One Travel
5X5X miles on flights booked through Capital One Travel.
2X2 Miles per dollar on every purchase, every day

Intro offer

75,000 bonus miles
Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel

Annual Fee

$395

Recommended Credit

740-850
Excellent
Credit ranges are a variation of FICO© Score 8, one of many types of credit scores lenders may use when considering your credit card application.

Why We Chose It

The Capital One Venture X card is one of the best all-round travel credit cards ever launched. Not only is it offering a tremendous welcome bonus, but cardholders can earn tons of miles on everyday spending and receive a 10,000-mile anniversary bonus to boot. Its annual fee is $395, but cardholders can count on up to $300 in statement credits toward travel booked through Capital One Travel each year and other valuable benefits like access to Priority Pass lounges and Capital One’s own growing family of airport lounges.

Pros

  • Excellent welcome offer worth 75,000 miles after you spend $4,000 on purchases in the first three months.
  • Up to $300 in annual travel statement credits toward bookings make through Capital One Travel.
  • 10,000 bonus miles (worth $100 toward travel) each account anniversary.

Cons

  • The $395 annual fee might be expensive for some, but this card’s benefits provide much more value than that.
  • If you don’t travel frequently, this might not be the best card for you.
  • Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel
  • Receive up to $300 back annually as statement credits for bookings through Capital One Travel, where you'll get Capital One's best prices on thousands of options
  • Get 10,000 bonus miles (equal to $100 towards travel) every year, starting on your first anniversary
  • Earn unlimited 10X miles on hotels and rental cars booked through Capital One Travel and 5X miles on flights booked through Capital One Travel
  • Earn unlimited 2X miles on all other purchases
  • Unlimited complimentary access for you and two guests to 1,300+ lounges, including Capital One Lounges and the Partner Lounge Network
  • Receive up to a $100 credit for Global Entry or TSA PreCheck®
  • Use your Venture X miles to easily cover travel expenses, including flights, hotels, rental cars and more—you can even transfer your miles to your choice of 15+ travel loyalty programs
  • Named editors' choice for "Best New Credit Card of 2021" by The Points Guy
  • Earn 10 miles per dollar when you book on Turo, the world's largest car sharing marketplace, through May 16, 2023
Best card for premium perks while traveling
TPG Editor‘s Rating
Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
4 / 5
Go to review

Rewards Rate

10XEarn unlimited 10X miles on hotels and rental cars booked through Capital One Travel
5X5X miles on flights booked through Capital One Travel.
2X2 Miles per dollar on every purchase, every day
  • Intro Offer
    Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel

    75,000 bonus miles
  • Annual Fee

    $395
  • Recommended Credit
    Credit ranges are a variation of FICO© Score 8, one of many types of credit scores lenders may use when considering your credit card application.

    740-850
    Excellent

Why We Chose It

The Capital One Venture X card is one of the best all-round travel credit cards ever launched. Not only is it offering a tremendous welcome bonus, but cardholders can earn tons of miles on everyday spending and receive a 10,000-mile anniversary bonus to boot. Its annual fee is $395, but cardholders can count on up to $300 in statement credits toward travel booked through Capital One Travel each year and other valuable benefits like access to Priority Pass lounges and Capital One’s own growing family of airport lounges.

Pros

  • Excellent welcome offer worth 75,000 miles after you spend $4,000 on purchases in the first three months.
  • Up to $300 in annual travel statement credits toward bookings make through Capital One Travel.
  • 10,000 bonus miles (worth $100 toward travel) each account anniversary.

Cons

  • The $395 annual fee might be expensive for some, but this card’s benefits provide much more value than that.
  • If you don’t travel frequently, this might not be the best card for you.
  • Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel
  • Receive up to $300 back annually as statement credits for bookings through Capital One Travel, where you'll get Capital One's best prices on thousands of options
  • Get 10,000 bonus miles (equal to $100 towards travel) every year, starting on your first anniversary
  • Earn unlimited 10X miles on hotels and rental cars booked through Capital One Travel and 5X miles on flights booked through Capital One Travel
  • Earn unlimited 2X miles on all other purchases
  • Unlimited complimentary access for you and two guests to 1,300+ lounges, including Capital One Lounges and the Partner Lounge Network
  • Receive up to a $100 credit for Global Entry or TSA PreCheck®
  • Use your Venture X miles to easily cover travel expenses, including flights, hotels, rental cars and more—you can even transfer your miles to your choice of 15+ travel loyalty programs
  • Named editors' choice for "Best New Credit Card of 2021" by The Points Guy
  • Earn 10 miles per dollar when you book on Turo, the world's largest car sharing marketplace, through May 16, 2023