Seattle, Washington - Boeing and Airbus are suffering delivery delay requests and order cancellations as airlines try to cope with the financial crisis generated by coronavirus pandemic.
The world’s largest planemakers make most of their money when they deliver jets, but airlines are doing everything possible to preserve cash as air travel plummets and even financially sound U.S. carriers could defer deliveries.
Dozens of brand-new aircraft were sitting outside factories at both planemakers, especially jetliners destined for China, witnesses said. China was the initial epicenter of a coronavirus outbreak that is now rapidly spreading across the world.
Up to 20 of Airbus’ hot-selling A321 jets were parked at its Hamburg, Germany facility. Meanwhile, one industry source said finished 787 Dreamliners were idled at Boeing’s plant in South Carolina, a key program already hit by slower sales in a softening widebody market.
Boeing shares fell as much as 20.5%, while Airbus closed down 7.2% after losing as much as 24% of its value at one stage.
737 MAX FACTOR
More problematically for Boeing, the global health crisis threatens the smooth return to service of its money-spinning 737 MAX, as cash-strapped airlines push off plans to absorb the grounded planes or make pre-delivery downpayments.
United Airlines President Scott Kirby has said the airline will not take deliveries for the time being, a decision that could also push back its 2021 delivery schedule.
The head of Southwest Airlines, Boeing’s largest 737 MAX customer, has said it will keep options open on aircraft deliveries this year as it watches demand.
Meanwhile, Airbus deliveries have been hit by the impact of the coronavirus on airline operations, especially in China, as well as snags in ramping up production and new travel rules.
In order to make it easier for airlines to take delivery without sending big teams, Airbus has rushed to design a tool called Electronic Transfer of Title (ETOT) which involves doing the transaction at a distance after reviewing photographs.
It usually takes several airline officials to review the paperwork, last-minute quality checks and financial arrangements needed to transfer the ownership or “title” of the asset worth tens of million of dollars and approve delivery.