Struggling Boeing records no new orders in January
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The first month of 2020 was a nonstarter for Boeing as it received zero orders for new aircraft in January.
Though the beginning of the year tends to be slow for new airplane orders as customers tend to back-load their orders in the previous year, Boeing is still facing significant headwinds from Airbus, which picked up almost 250 new orders last month across its A220, A320 and A350 aircraft families.
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Boeing did deliver 13 new planes in January, but that was less than half the number its European rival got off the production line.
“It is significant,” said Richard Aboulafia, an aviation analyst at Teal Group. He said there are three factors that help explain Boeing’s January shortfall.
“One is the market is glutted, two: what market there is, is moving to the mid-sized, which means A321neos and lots of them, and on top of that of course, you’ve got a terrible wide-body market, which is where Boeing is strongest.”
Boeing’s order book issues are only compounded by the ongoing 737 MAX grounding, but Aboulafia said that even if that plane were flying, it wouldn’t be a perfect answer to the current market demands.
Related:737 MAX woes send Boeing to first annual loss since 1997
The capacity of the Max — from about 150 seats to up to 200, depending on how its cabin is configured — is not as in-demand by airlines right now as compared to the larger capacity offered by Airbus’s A320neo family. In particular, the largest A321neo variants can hold 200 or more passengers.
“The 150-seat market just isn’t as strong as the 200-seat market,” he said. “As that 150-seat market comes back again, the MAX 8 will do just fine, it’s just not in the right part of the market” right now.
Boeing officials said during the 777X first flight that the company predicts a boost thanks to wide-body fleet renewals that it anticipates airlines will begin to undertake by the middle of this decade. But for now, Aboulafia said, Boeing is likely to remain behind Airbus with no direct competitor to the A321neo.
“The takeaway is Boeing needs to launch a new product. That’s the bottom line,” he said.
But just weeks ago, Boeing announced it would put on hold its plans to develop a new mid-market airplane. David Calhoun, the company’s new CEO, said directly that Boeing will not create a new airframe just to compete with the A321neo.
“Doing them fast and doing them in response [to the A321]… is not what you do when you’re developing the next airplane,” Calhoun said on a Jan. 29 call with reporters. “It’s critical we get it right.”
Related:‘This is a crucial time for Boeing,’ new CEO says on first day
Featured photo by Stephen Brashear/Getty Images.
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