Covid-19 has made matters worse for Boeing. In fact, the company has seen orders for 108 of these MAX planes canceled. In addition to the other sectors of activity heavily impacted by the lockdown, the commercial aircraft industry was not spared.
It should be recalled that Boeing’s orders have experienced an extraordinary drop due to the anomaly discovered in the 737 MAX, which caused two aircraft crash in less than six months: one belonging to the Indonesian company Lion Air and which had just taken off from Jakarta airport on October 28, 2018, and the other acquired by Ethiopian airlines after taking off from Addis Ababa airport on March 10, 2019. Since then, planes in this category have been nailed to the ground at all airports around the world as well as on American soil.
BOEING stock accumulated a loss of around 60% in 2020
Boeing’s market performance, therefore, had to follow its commercial conditions and its stock recorded a hard decline of 1% which equates to $ 127.52. It should be noted that the stock accumulated a loss of around 60% in 2020. However, this loss of altitude in the financial market does not only concern Boeing but several companies in the aerospace industry such as its competitor Airbus, which was also affected by a drop of 61%.
Add to that the decrease in air traffic around the world due to the coronavirus which results in the fall in the volume of travelers and consequently the cancellation of aircraft orders from both sides. Since January 2020 alone, Boeing has experienced 304 order cancellations.
Prior to 2019, the Boeing 737 MAX was most in demand by international airlines, with around 400 aircraft remaining in the factory warehouses, but the airline’s ban since March has plunged the company into a major financial crisis. Boeing hoped, on the other hand, that stopping production of the MAX would alleviate the significant financial pressures resulting from the non-delivery of approximately 375 aircraft, but that could cause industrial problems when Boeing attempted to resume its previous activity.
Boeing expects a decline in 787 Dreamliner production to reach ten aircraft per month in early 2021.
As a result, the costs associated with stopping flights of 737 MAX aircraft worldwide reached $ 14.6 billion in 2019, about half of which represented damage to airlines that had to cancel tens of thousands of fly knowing that the company had warned of an additional financial burden of $ 4 billion in 2020.
Boeing – which is facing the largest crisis in its history – had previously estimated that the costs of the consequences of the MAX crisis would reach about 8 billion dollars, while analysts’ estimates ranged between 16 and 25 billion dollars.
