While still far behind its output in 2018, down 60% from 2019, and trailing Airbus for recent deliveries, Boeing did pick up delivery volume in the final quarter of 2020. In delivery stats posted this week, Boeing says it delivered 31 737 models in the last quarter, bringing its yearly total to just 43. It also saw deliveries across its commercial catalog, including the 777 (11 delivered), 767 (10), 787 (4) and 747 (3). Boeing previously said it is ending production of the 747 next year and is in the process of moving its 787 Dreamliner production to a single line in South Carolina.
“Through the global pandemic, we took meaningful steps to adapt to our new market, transform our business and deliver for our commercial, defense, space and services customers in 2020,” said Greg Smith, Boeing executive vice president of Enterprise Operations and chief financial officer. “The resumption of 737 MAX deliveries in December was a key milestone as we strengthen safety and quality across our enterprise. We also continued comprehensive inspections of our 787 airplanes to ensure they meet our highest quality standards prior to delivery. While limiting our 787 deliveries for the quarter, these comprehensive inspections represent our focus on safety, quality and transparency, and we’re confident that we’re taking the right steps for our customers and for the long term health of the 787 program. As we continue navigating through the pandemic, we’re working closely with our global customers and monitoring the slow international traffic recovery to align supply with market demand across our widebody programs. In 2021, we’ll continue taking the right actions to enhance our safety culture, preserve liquidity and transform our business for the future.”
Boeing says the 737 line will see a gradual production increase to 31 a month by the beginning of 2022, “with further gradual increases to correspond with market demand.” There are still more than 3,400 orders on the books for 737 models, led by the recently returned to service MAX models. The planemaker has, however, taken more than 1,100 MAX orders off the book, either from outright cancellations or through accounting changes that acknowledge many of the airlines or leasing companies will be financially unable to complete the purchases.
Boeing plans to reduce production on other models through 2021, though. The 777 will drop to just two a month this year (from five), and the 787 will slow from 10 a month to six. In 2018, Boeing delivered a record 806 commercial jets.
Atlas Air has helped Boeing’s order book by placing an order for four 747-8 freighters this week, which will be delivered in 2022 and are expected to be the last of the venerable 747 design to be produced.
Boeing’s liquidity ratio (assets/liabilities) declined 22% from 2015-2019, while their cash ratio shrank
by 58%. At the beginning of 2020, those figures were the lowest in the industry (1.05 and .10, resp.).
The NYSE report (readily available online) described Boeing’s overall performance as “deteriorating.”
That was before the pandemic. It strains credulity to suppose that their situation has improved or
that their financial outlook is better than it was a year ago, though the year-end figures have yet to
be posted. Therefore, it is hard to understand what Mr. Smith means when he opines that “in 2021,
we’ll continue taking the right actions to enhance our safety culture, preserve liquidity and transform
our business for the future.” Judging by the balance sheet, Boeing’s future is in severe jeopardy, as
is the gyroscopic equilibrium of their aircraft. To paraphrase Will Rogers, there ain’t much liquidity
left to preserve, either. The “transformation” that Mr. Smith confidently predicts will undoubtedly
occur, but it is likely to occur in receivership, pursuant to a Chap. 10 bankruptcy, or else through
a corporate buy-out, or a shotgun merger between Boeing and one of their erstwhile competitors.
Whatever the future may bring, in Boeing’s case, it is more than likely to be their aviation history.