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Air CargoNews

Boeing deliveries plummet in Q3

737 MAX grounding cuts heavily into plane maker's ability to fill orders.

Commercial airplane deliveries at The Boeing Co. [NYSE: BA] nose-dived by two-thirds in the third quarter compared to the same period in 2018 and by almost half year-to-date, according to figures released by the company Oct. 8.

The plunge in sales is largely due to the March grounding by regulators of the next-generation 737 MAX for safety reasons following two deadly international crashes within the past year. 

Boeing says it has made software fixes to prevent automated systems from overriding pilots on takeoff and pushing the nose down during takeoff based on faulty sensor data. The Federal Aviation Administration reviewing the new safety designs and some aviation industry officials expect it to clear the 737 MAX to return to service as soon as November. A worry for Boeing is that lifting of the no-fly order could be done in phases by regulators around the world, slowing production and revenue streams.

Boeing customers received 63 planes in the third quarter, eight of which were commercial variants for military customers. A year ago, the manufacturer delivered 190 planes and in 2017 there were 202 deliveries in the quarter.

September deliveries totaled 26 planes, compared to 87 in September 2018, and 78 in 2017.

During the first nine months of the year, Boeing has delivered 302 jetliners, including 118 versions of the 737 and 33 for military customers. Delivery volume fell 47% compared to the 568 deliveries in 2018. In 2017, Boeing customers received 554 planes.

Boeing, headquartered in Chicago, has 4,930 737 MAX planes on order, but has only delivered 387 of them so far. It has continued to make the planes at its Renton, Washington, plant, albeit it at a slower rate, and store them in anticipation of the flying ban being eventually lifted.

Aircraft manufacturers typically get about half of a customer’s payment upon delivery.

Airlines had flocked to the 737 MAX for medium-haul routes because of its increased range, fuel efficiency, technology and customer features. 737s in passenger service typically only carry a few hundred pounds of cargo, but are still important to shippers with smaller loads looking for less expensive air transport than with a chartered freighter or UPS and FedEx.

In September, UPS [NYSE: UPS], Fed Ex [NYSE: FDX] Express and DHL each received two wide-body freighters from Boeing.

On Oct. 7, Southwest Airlines’ pilots union filed a lawsuit against Boeing for what it claimed were misrepresentations about the 737 MAX’s safety and causing its members $115 million in lost compensation because of downtime. Many airlines are also in talks with Boeing for compensation due to lost revenue opportunities and other costs associated with not having the MAX available for service.

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Eric Kulisch

Eric is the West Coast Air Cargo Reporter at FreightWaves. An award-winning business journalist with extensive experience covering the logistics sector, Eric spent nearly two years as the Washington, D.C., correspondent for Automotive News, where he focused on regulatory and policy issues surrounding autonomous vehicles, mobility, fuel economy and safety. He won a regional Gold Medal from the American Society of Business Publication Editors for government coverage, and was voted best for feature writing and commentary in the Trade/Newsletter category by the D.C. Chapter of the Society of Professional Journalists. As associate editor at American Shipper Magazine for more than a decade, he wrote about trade, freight transportation and supply chains. Eric is based in Portland, Oregon. He can be reached for comments and tips at ekulisch@freightwaves.com

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