Boeing orders bounce back on demand for a plane it can’t deliver yet
By Chris Isidore, CNN
New York (CNN) — Boeing’s commercial jet orders bounced back in March, but it was due to a large order from American Airlines for a plane the Federal Aviation Administration hasn’t even approved to carry passengers yet.
American placed orders for 85 of the Boeing 737 Max 10, the largest version of that troubled aircraft. It also converted previous orders for 30 of the shorter Max 8 version of the plane, which is currently flying, into additional Max 10 orders. American also has options to buy another 75 Max 10s in the future.
The order had been announced a month ago, and it was included in the March and first quarter sales and delivery report by Boeing on Tuesday. That report showed no other orders for any version of the 737 Max. Besides American’s large Max order, Boeing also received orders for 28 of its widebody 777 jets during the month.
But certification of the Max 10, which had been due to start flying passengers by this year, has been pushed back in the wake of the January 5 Alaska Airlines flight of a 737 Max 9, which had a door plug blow out, leaving a gaping hole in the side of the plane.
Questions about anti-icing equipment on the Max engines would have required Boeing to get a waiver from the FAA to get the Max 10 and a smaller Max 7 model certified. But criticism of Boeing’s safety and the quality controls in the wake of the Alaska Air incident prompted Boeing to withdrawal its request for a waiver, thus bringing the certification process to a temporary halt.
The door plug incident prompted United Airlines CEO Scott Kirby to announce it was no longer counting on the 737 Max 10 planes it had already ordered from Boeing, saying the problem was the “straw that broke the camel’s back” for the airline’s expectations for the plane. While it has yet to drop its orders for the Max 10, Kirby has said the airline is interested in possibly buying competing planes from Boeing rival Airbus. But it would likely be a much longer wait for United to get planes from Airbus due the backlog of orders the European aircraft maker has.
Boeing had had a record month for commercial jet orders in December ahead of the Alaska Air incident, capping a strong year for sales overall. But its orders ground to a near halt in January after the January 5 flight, causing it to suffer its worst month for orders since the pandemic. While it bounced back to report 15 orders in February, that was far below Boeing’s normal monthly volume.
Thus, the order from American, which has its mainline fleet roughly split between Airbus and Boeing, was an important vote of confidence for the trouble aircraft maker. Orders for planes before certification are not unusual in the aerospace industry but not typically when there are questions about when the plane might be cleared to carry passengers.
Boeing also reported it delivered only 24 of the 737 Max jets in the month, and five 787 Dreamliners. Its production of planes has been slowed by the questions about its quality controls since the Alaska Air incident as well, and the lack of deliveries has caused problems for some of its airline customers, including United Airlines, which has put a freeze on pilot hiring and asked some pilots to take voluntary unpaid leave.
Southwest Airlines also reduced hiring plans, saying it will bring on 50% fewer pilots and 60% fewer flight attendants than planned this year due to Boeing cutting 737 Max deliveries to the airline by about 40%.
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