Boeing’s 737 Max comeback fuels rare sales win over Airbus

(Bloomberg)—Boeing Co. topped Airbus SE in quarterly jet sales for the first time since early 2019, when the U.S. planemaker spiraled into crisis because of a global grounding of its 737 Max after two fatal crashes.

Gross orders in the first quarter totaled 282 aircraft, according to sales data posted to Boeing’s website Tuesday. Including cancellations and an accounting adjustment for at-risk deals, the company netted 76 new orders. Airbus’s tally shrank by 61 jets after a slew of cancellations in February by Norwegian Air Shuttle ASA.

Both manufacturers are navigating a difficult market, as spotty progress against the coronavirus pandemic spurs uncertainty about when travel will rebound. But low-cost airlines looking to tap pent-up demand for vacations are already preparing to grab market share as the health crisis abates, said Bloomberg Intelligence analyst George Ferguson. As an example, he pointed to Southwest Airlines Co.’s landmark order of 100 Max aircraft last month.

“In every market around the world, the same thing’s going to happen—leisure travel’s going to lead the way out,” Ferguson said before Boeing released its sales totals.

Boeing reversed losses after posting its orders figures, advancing 1.7% to $253.79 at 11:25 a.m. in New York for the biggest gain on the Dow Jones Industrial Average. The shares climbed 17% this year through Monday, outpacing the Dow’s 10% increase.

Airbus Streak

The optimism about leisure travel helped Airbus maintain a winning streak in deliveries that goes back to mid-2018, according to Bloomberg Intelligence. Bolstered by handovers to budget carriers such as Europe’s Wizz Air Holdings Plc and India’s IndiGo, Airbus shipped 125 jetliners in the first quarter, compared with 77 for Boeing.

Late last month, Boeing handed over its first two 787 Dreamliners since October. Deliveries had been halted as the Chicago-based company inspected the model’s carbon-fiber structures for tiny manufacturing defects.

Boeing booked 196 gross orders in March, all of them for the 737 family of aircraft. But the planemaker also recorded 156 cancellations, as carriers such as United Airlines Holdings Inc. scrapped old contracts for the Max and reached new, discounted terms that gave them earlier delivery slots.

Customers gain leverage to cancel or change deal terms for planes that have been delayed more than 12 months. That’s added to the churn in Boeing’s order books and manufacturing schedule. The company is offering discounts on new orders to compensate airlines for the Max’s 20-month grounding, which was imposed by U.S. regulators in March 2019 after the crashes killed 346 people.

Boeing’s 777 backlog expanded to 263 in March after the planemaker included 15 orders for the new 777X that had been considered in jeopardy. A U.S. accounting standard requires the company to remove from its backlog contracts that are at risk of cancellation, even though it continues to hold firm orders for the jets.

(Updates with shares in fifth paragraph)

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