Boeing says China has sent back its planes, but sees little impact from trade war
Boeing saw its shares rise on Wednesday amid a more positive-than-expected earnings report. The company lost 49 cents per share instead of the expected loss of $1.29 per share.
But the optimism was further fueled after the company’s CEO said the trade war initiated by U.S. President Donald Trump shouldn’t have a major impact on its finances.
Kelly Ortberg acknowledged, however, that Chinese airlines have warned Boeing that they won’t be getting its jets. The planemaker had planned to deliver 50 aircraft to customers in the country by 2025, with 41 of them in storage for some time.
Two 737 MAX 8s that were supposed to be delivered to Xiamen Airlines returned to the United States in recent days, but it was still unclear who gave the order to return them.
“Due to the tariffs, many of our customers in China have indicated they will not take delivery,” Ortberg said, noting the impact of the decision since “everybody wants the aircraft.”
Production rate increasing
Reports indicate that at least Air India and Malaysia Airlines have already expressed interest in keeping the aircraft.
According to CFO Brian West, the tariffs imposed by Trump should result in less than US$ 500 million in extra costs.
The pent-up demand for new and more efficient commercial aircraft appears to be one of the reasons for the calm shown by Boeing executives.
The company also revealed that it is producing 30 737 MAXs per month and is on track to reach the rate of 38 aircraft per month, the maximum allowed by the FAA for now. The goal, however, is to reach 52 aircraft to reduce the waiting list.
There are also plans to increase the production rate of the 787 Dreamliner from the current five to seven jets per month.
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