Struggling Boeing records no new orders in January

Feb 13, 2020

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.

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.

Sign up for the free daily TPG newsletter for more aviation news

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.

Delta SkyMiles® Platinum American Express Card

Earn 90,000 bonus miles and 10,000 Medallion® Qualification Miles (MQMs) after you spend $3,000 in purchases on your new card in the first three months of card membership. Offer ends 11/10/2021.

With Status Boost™, earn 10,000 Medallion Qualification Miles (MQMs) after you spend $25,000 in purchases on your Card in a calendar year, up to two times per year getting you closer to Medallion Status. Earn 3X Miles on Delta purchases and purchases made directly with hotels, 2X Miles at restaurants and at U.S. supermarkets and earn 1X Mile on all other eligible purchases. Terms Apply.

Apply Now
More Things to Know
  • Limited Time Offer: Earn 90,000 Bonus Miles and 10,000 Medallion® Qualification Miles (MQMs) after you spend $3,000 in purchases on your new Card in your first 3 months. Offer expires 11/10/2021.
  • Earn up to 20,000 Medallion® Qualification Miles (MQMs) with Status Boost® per year. After you spend $25,000 in purchases on your Card in a calendar year, you can earn 10,000 MQMs two times per year, getting you closer to Medallion® Status. MQMs are used to determine Medallion® Status and are different than miles you earn toward flights.
  • Earn 3X Miles on Delta purchases and purchases made directly with hotels.
  • Earn 2X Miles at restaurants worldwide, including takeout and delivery and at U.S. supermarkets.
  • Earn 1X Miles on all other eligible purchases.
  • Receive a Domestic Main Cabin round-trip companion certificate each year upon renewal of your Card. *Payment of the government imposed taxes and fees of no more than $75 for roundtrip domestic flights (for itineraries with up to four flight segments) is required. Baggage charges and other restrictions apply. See terms and conditions for details.
  • Enjoy your first checked bag free on Delta flights.
  • Fee Credit for Global Entry or TSA Pre✓®.
  • Enjoy an exclusive rate of $39 per person per visit to enter the Delta Sky Club® for you and up to two guests when traveling on a Delta flight.
  • No Foreign Transaction Fees.
  • $250 Annual Fee.
  • Terms Apply.
  • See Rates & Fees
Regular APR
15.74%-24.74% Variable
Annual Fee
$250
Balance Transfer Fee
N/A
Recommended Credit
Excellent/Good
Terms and restrictions apply. See rates & fees.

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.