For the first time in years, Boeing’s (NYSE: BA) gross aircraft orders for 2019 slumped to an all-time low fuelled by a drop in orders for the 737 model. Data gathered by Learnbonds.com indicates that the gross orders declined from 1,090 recorded in 2018 to 246 for the last year, a drop of about 80%.
Additionally, aircraft manufacturer Boeing received the lowest gross aircraft orders in 2019. Data gathered by Learnbonds.com indicates that the gross orders declined from 1,090 in 2018 to 246 for last year, a drop of about 80%.
The slump was majorly fuelled by a significant drop in the orders for the 737 narrow-body jet airliner. Last year, Boeing received only 69 unit orders for the model representing.
This is a significant drop of about 91.7% from the 837 orders received in 2018. Over the last 16 years, orders for the 737 model peaked between 2012 and 2014. The highest orders were received in 2013 at 1,208, an increase of 1.9% from the previous year. In 2014, the orders slightly dropped to 1,196.
Over the last ten years, Boeing only registered the lowest 737 orders in 2009. The firm delivered only 197 units, something attributed to the great depression that affected many businesses at the time.
The drop came after a steady increase in the number of orders from 2004 when the deliveries stood at 152. A year later, the units increased to 574 representing a growth of 73.5%. In 2006, the orders further increased to 733 units and later 850 units. The decline was first experienced in 2008 when the orders were 488. This was the period the great recession was beginning to set in.
The 737 Max safety concerns
The massive decline in the number of 737 orders in 2019 is due to the controversy surrounding the 737 Max. The safety of the plane was put into question after being involved in two fatal crashes that took the lives of 346 people. Both crashes were linked to a piece of software that Boeing had installed on the 737 Max known as the Maneuvering Characteristics Augmentation System.
The orders declined further after the 737 models were grounded in March last year. Currently, the American air manufacturer is working to get recertification for the model from the Federal Aviation Administration.
This was the worst performance by Boeing in history since the manufacturer only recorded a drop in orders in 2009 when they stood at 263. Notably, Boeing’s gross peak orders were achieved in 2014, when it registered 1550 gross orders.
In 2017, the gross orders had increased by about 19% from 848 units ordered in 2016.
During this period, Boeing lost most of its clients to European airplane manufacturer Airbus. In 2019, Airbus’ gross aircraft orders were 1131, an increase of about 26.5% from the 831 gross orders received in 2018.
Over the last 14 years, Boeing and Airbus have been competing taking the lead in aircraft manufacturing globally. The last time Airbus gross airplane orders were significantly high compared to Boeing was in 2011. During this period, the European manufacturer had 1,608 gross orders compared to Boeing’s 921, representing a percentage difference of 42.7%.
Cumulatively, since 2006, Airbus has received more gross aircraft orders at 15,403 compared to Boeing’s 13,486. Sadly, in 2019, Boeing experienced a sudden stagnation in the number of gross orders compared to Airbus.
Tough times for Boeing
Boeing and Airbus are ranked as the two leading aircraft manufacturers worldwide. Both companies have produced highly successful jet models, like the Airbus A320 and Boeing’s 737 aircraft, which was often named as one of the best-selling jets worldwide before coming under scrutiny for falling short of safety standards.
With the drop in gross aircraft orders, Boeing stock price has also significantly slumped. In February, Boeing’s stock price lost more than 60% of its value, something mainly attributed to the Coronavirus, which has affected the airline industry. Furthermore, the 737 max crisis has also affected the manufacturer’s stock performance. Currently, Boeing has reached out to Washington over an aid package.
With the ravaging COVID-19, most airlines have grounded flights while freezing the hiring of employees. Most countries have also banned air travel from countries affected by the epidemic in a move to contain the spread.