Boeing Receives Just One New Order in May Leading Stock to Decline

 

Boeing, a prominent jet maker, experienced a significant decline in its shares on Tuesday following the release of a report that showed a notable drop in deliveries in May compared to the previous year. The company only received one new order for four planes last month, which pales in comparison to its competitor Airbus, who received orders for 27 aircraft during the same period.

The main reason for Boeing's struggles in delivery and production is the grounding of its 737 MAX planes. After an Alaska Airlines flight experienced a fuselage issue in January, the Federal Aviation Administration (FAA) prohibited Boeing from ramping up production of the 737 MAX model. This incident led to investigations by both the FAA and the Department of Justice into Boeing's safety and quality control practices.

In May, Boeing's order volume took a significant hit, dropping to just one new order for four jets, compared to seven planes from three orders in April. Additionally, the backlog of orders decreased from 5,646 in April to 5,625 in May. The fallout from the 737 MAX incident continues to plague Boeing as it struggles to regain momentum in production and delivery.

Out of the 24 planes Boeing delivered in May, 19 were 737 MAX jets. This number was slightly higher than the three jets delivered in April but significantly lower than the 35 jets delivered in May the previous year. In contrast, Airbus, Boeing's largest competitor, delivered 53 planes in May and received orders for 27 aircraft, highlighting the growing gap between the two companies.

As a result of these challenges, Boeing's shares experienced a drop of almost 2.4% on Tuesday, trading at nearly $186 as of 3:10 p.m. Eastern Time. The company's shares have already lost nearly 30% of their value since the beginning of the year, signaling a tough road ahead for Boeing as it navigates through the aftermath of the 737 MAX debacle.

In conclusion, Boeing's struggles in production and delivery in May underscore the ongoing challenges the company faces in the aftermath of the 737 MAX crisis. With orders declining and shares plummeting, Boeing must work diligently to overcome these obstacles and regain its position in the competitive aerospace industry.