Boeing customers cancel 150 jet orders in March amid coronavirus crisis & 737 MAX debacle

The plunging demand for air travel due to the Covid-19 pandemic has led to massive cancellations of jet orders by Boeing customers. It adds to the American plane-maker’s continued struggle in the aftermath of the MAX 737 crisis.

The company said that 150 orders for 737 MAX jets were canceled in March, which is the most in a decade. Brazilian airline Gol canceled 34 orders for the narrow-body planes, while leasing firm Avolon scrapped orders for 75 of them. Boeing had also reported 41 canceled orders for the jet in February.

“We are working closely with our customers, many of whom are facing significant financial pressures, to review their fleet plans and make adjustments where appropriate,” the manufacturer said in a statement.

The coronavirus pandemic follows the grounding of the 737 MAX for over a year after 346 people were killed in two crashes less than six months apart. Boeing has been struggling to find a fix for the safety system blamed for the crashes.

The huge number of canceled orders was not a surprise, according to aerospace analyst for the Teal Group, Richard Aboulafia. He said the current crisis is far more serious for Boeing than its earlier troubles getting approval for the 737 MAX to fly again.

“Even these unpleasant numbers are kind of meaningless because the reality is much worse,” Aboulafia told CNN, adding that Boeing still has a backlog of orders for thousands of jets it has yet to build. The analyst noted a larger risk that airlines may defer delivery of many of those jets until the market for travel improves, which will likely take years.

According to tracking service Circium, there are now nearly 14,000 jets parked by airlines around the world, representing 63 percent of the global fleet. Boeing, which had 161,000 employees at the start of the year, suspended operations at the South Carolina plant where it makes 787 wide-body planes. 

Media reported last week that Boeing could cut its workforce by around 10 percent as the Covid-19 pandemic continues to take a toll on the global airline industry. The company could reportedly offer its workers early retirement as well as voluntary layoffs. The plan could also include buyouts.

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