Seattle: Boeing Co said on Wednesday it had booked firm orders for 80 of its 737 MAX 8 aircraft, valued at $8.8 billion (Dh32.3 billion) at list prices, upping its 2016 tally but leaving it short of its goal.
The orders mean the world’s biggest plane maker clinched at least 536 net jetliner sales last year compared with its target of selling as many commercial jets as it delivers, a total it puts between 745 and 750. Through November, Boeing had delivered 681 planes.
Boeing’s order tally could climb again on Friday, as the company posts its final update for 2016.
Investors watch orders closely as a way to gauge future production and revenue, since Boeing earns the bulk of its money when aircraft are delivered.
The company has orders equivalent to about seven years of production, but the majority are single-aisle 737 planes, and sales of its more expensive widebodies like the 777 remain sluggish.
Boeing Chief Executive Dennis Muilenburg affirmed the company’s overall order target in July. In December, he said Boeing would cut 777 output by 40 per cent this year due to slow sales of widebody planes.
The orders announced Wednesday include 75 Boeing 737 MAX 8s for General Electric Co Capital Aviation Services (GECAS), valued at $8.25 billion at list prices.
GE supplies engines for the 737 MAX through CFM International, a joint venture with Safran SA of France. The latest sale means GECAS now has 170 Boeing 737 MAXs on order, more than any other leasing company, Boeing said.
Quiet period
The remaining orders, valued at $550 million, came from Travel Service, the largest airline company in the Czech Republic, which operates as SmartWings, Boeing said.
Through December 20, Boeing booked 470 net orders in 2016.
Since then, it has announced orders for four 737-800s by Jet2.com. On December 27, Delta Air Lines said it was cancelling an order for 18 Boeing 787 Dreamliners. Northwest Airlines placed the order before it merged with Delta.
Tallying the changes, Boeing’s book-to-bill ratio is 0.79, below the target of 1.0.
A Boeing spokesman declined to comment, citing a quiet period before fourth-quarter earnings on Jan. 25.
Boeing has received over 3,400 orders for the 737 MAX. The first 737 MAX is expected to be delivered in the first half of 2017.
Boeing’s shares were up about 1 per cent at $158.46. Up to Tuesday’s close, the stock had risen 11.7 per cent in the past 12 months, compared with a 12.2 per cent rise in the S&P 500 index.
Factbox: Airbus executive sees low risk of order cancellations
Order cancellations are not a major risk factor for the aerospace industry this year, a senior Airbus executive said on Thursday, dampening concerns about a downturn in the aerospace industry’s cycle amid fragile global economies. “The risk of order cancellations is not very high on our list of risks for this year,” Marwan Lahoud, executive vice-president of international, strategy and public affairs, told a briefing as head of France’s Gifas aerospace industry lobby.
On the challenges of increasing aerospace production to keep up with past strong orders, the head of French aerospace supplier Daher, Patrick Daher, said most companies had absorbed the investments needed to meet their production targets.
“The obstacles should diminish in 2017 compared to 2016,” he told the same briefing, referring to the risk of delays and quality problems that disrupted some deliveries last year.
Lahoud declined to comment on Airbus deliveries.
