Coronavirus Squeezes Boeing Hard, Deliveries Shrink To Four In May

Boeing Co. BA delivered just four aircraft in May, as the coronavirus pandemic decimated the demand for flying, negatively affecting the company's airline customers, who are battling for survival.

What Happened

After delivering six planes in April, Boeing delivered just four in May, which is the lowest total in six decades for the planemaker. Deliveries have fallen by 87% compared with the same period a year ago, according to Reuters.

Cancelations have ratcheted up, with customers foregoing orders of 18 planes last month, including 14 MAX commercial jets. 

Among Boeing’s customers who have canceled or deferred orders since January are Southwest Airlines Co. LUV, United Airlines Holdings Inc. UAL, and Brazil’s GOL. 

Why It Matters

Deliveries are vital for Boeing, as airlines pay a bulk of the purchase price only when they collect the plane, reported Reuters.

Last month Boeing restarted manufacturing its 737 MAX planes. The planes have been prohibited from flying since March 2019, after two fatal air crashes killed 346 people.

Cancelations for May include three from Aviation Group, one from CIT Aviation, four from General Electric Co.’s GE leasing division, and six unidentified customers.

Boeing’s adjusted 2020 net orders stand at -602 planes.

The planemaker announced massive job cuts last month, affecting both domestic and global staff. Most of the layoffs are related to Boeing’s commercial customers.

Boeing Price Action

Boeing shares traded 0.41% lower at $215.85 in the after-hours session on Tuesday. The shares had closed the regular session 5.99% lower at $216.74.