CHICAGO -- Boeing orders and deliveries of new jetliners tumbled last year as the company struggled with the worldwide grounding of the 737 Max, which had been its bestselling plane.
Gross orders fell to their lowest mark in 16 years. Boeing reported more cancellations than new orders in 2019, in large part because a big order from India's Jet Airways was likely to vanish after the airline went bankrupt.
Chicago-based Boeing said Tuesday that it booked 246 gross orders, the lowest total since 2003. But after cancellations, the number of net orders was 54.
After subtracting other orders that are too doubtful to stay in Boeing's backlog -- such as the Jet Airways deal -- the company had a net loss of 87 orders last year.
Deliveries fell 53%, from 806 planes in 2018 to 380 last year. That left Boeing far behind European rival Airbus, with 863 deliveries, in the race for global supremacy in plane-building.
But Boeing finished 2019 with a flurry of 787 Dreamliner shipments that will help bolster its cash. The company handed over 45 of the marquee long-haul jets in the fourth quarter. That was five more than estimated by Cowen & Co. analyst Cai von Rumohr, who said "the 787-driven delivery beat" could add about $1.5 billion to revenue.
Boeing shares reversed losses after the release of the data, which also showed that deliveries of satellites and military aircraft surged to 231 units from 98 a year earlier. The shares climbed less than 0.65% to $332.35 in New York.
"Underlying deliveries were strong outside of the 737 Max," Sheila Kahyaoglu, a Jefferies analyst, said in a note to clients.
The 737 Max was Boeing's bestselling plane until two of them crashed five months apart, killing 346 people and prompting regulators around the world to ground the plane in March. The company lists 4,545 unfilled orders for the Max, a backlog that would take several years to work down.
However, Boeing is pausing production of the Max because it is unclear when the plane will fly again. Boeing is still making changes to software and other systems, and the Federal Aviation Administration has said repeatedly that it has no timetable for approving Boeing's work.
In a sign of changing expectations around the plane's return, American Airlines said Tuesday that it is removing the Max from its schedule for an additional two months, until early June, and expects to cancel 140 flights a day until then.
American Airlines has 24 Max jets, and it expected to have 40 by the end of last year and another 10 this year. Without the planes, it canceled about 36,000 flights last year and expects to cancel nearly 21,000 through June 3.
The airline has estimated that the planes' grounding cost it $540 million in pretax income during 2019 -- a figure that American could update when it reports fourth-quarter results next week. The Fort Worth carrier said last week that it reached a settlement with Boeing over compensation for grounding-related damages, but it didn't disclose financial details.
The airline's schedule for a June return of the Max puts it in line with United Airlines. Southwest Airlines, which has more Max jets than American or United, has removed the plane from its schedule through April 13.
Meanwhile, Boeing is talking to a group of banks about a potential loan as it deals with the production halt of the 737 Max jetliners, according to people familiar with the matter.
Citigroup Inc. is leading the discussions between Boeing and a small group of banks, said the people, who asked not to be named because the details are confidential. The precise structure and timing of the loan is in flux, but the financing may be an investment-grade term loan, they said.
Representatives for Citi and Boeing declined to comment.
Boeing's access to the credit markets could soon get more expensive. Moody's Investors Service placed Boeing's A3 senior unsecured debt rating on review for downgrade Monday, saying Boeing could face a "costly and protracted" recovery and "heightened operational and financial risk." Any Moody's action could give Boeing a rating in the lowest tier of investment-grade rankings. S&P Global Ratings cut the company to A-, the fourth-highest high-grade rank, in December.
Information for this article was contributed by staff members of The Associated Press and by Julie Johnsson, Paula Seligson and Jeannine Amodeo of Bloomberg News.
Business on 01/15/2020