Boeing Co.’s aircraft deliveries declined in July, while order cancellations for its 737 MAX aircraft continued as travel restrictions tied to the coronavirus pandemic have throttled commercial jet demand.
The ailing plane maker said that last month 43 of its 737 MAX aircraft were cancelled. AerCap canceled orders for 15 of its 737 aircraft, which have been grounded since March 2019 following a second crash.
Boeing (BA) delivered only 4 planes in July – two 787 Dreamliners and two freighters – down from 10 in June taking the total to a monthly 52 net cancellations. The aerospace giant did not receive any new orders in July, as air travel demand has been disrupted in an effort to contain the coronavirus pandemic.
Total year-to-date deliveries amounted to 74 aircraft with gross orders of 59 planes. As of the end of July, Boeing lost a total of 836 plane orders this year. The report comes as the company said last month that it would cut production of its 787 and 777/777X aircraft after posting a larger 2Q loss than estimated.
The coronavirus travel restrictions have resulted in a deep cut in the number of commercial jets and services Boeing customers need over the next few years. As such, global airlines suffering billions of dollars in losses have been seeking to cancel or delay some of the orders they have with Boeing.
Shares in BA have plunged 45% year-to-date, but analysts have a cautiously optimistic Moderate Buy consensus on the stock. That’s with a $187.63 average analyst price target (4.2% upside potential).
For now, Cowen & Co’s Cai Rumohr is sitting on the sidelines with a $150 price target, saying that deliveries remain depressed even though some COVID-19-related travel restrictions have eased. (See BA stock analysis on TipRanks)
“BA delivered only four aircraft in July vs. ten in June and our July est. of 17. The primary shortfall was in the 787, where BA delivered two 787’s vs. our est. of 11. It also missed on the 767 (1 vs. 3E) and 777 (1 vs. 2E),” Rumohr wrote in a note to investors. “Customer deferrals remain the key issue as customers push out accepting 787 deliveries given international travel remains depressed.”
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