Boeing Max Orders Fall as Air Lease Swaps for 787 Dreamliner

(Bloomberg) -- Sales for Boeing Co.’s grounded 737 Max slipped in October after a prominent customer converted some of its orders for the narrow-body jet to twin-aisle 787 Dreamliners.

Boeing’s unfilled 737 order backlog, adjusted for accounting considerations, shrank by 19 aircraft during the month to 4,387 jets, the Chicago-based planemaker revealed on its website Tuesday. The planemaker garnered negative 93 orders for the Max, net of cancellations and conversions, through the first 10 months of the year.

In all, Boeing removed 21 airplanes from its books last month as it reconfigures its production schedule for the Max and offers deals on wide-body jets like its Dreamliner to airlines reeling from a global flying ban. Sales of the updated 737, the latest generation of a design dating to the mid-1960s, have dwindled since regulators halted flights in March following two fatal accidents that killed 346 people.

As it prepares to restart Max deliveries, possibly as soon as next month, Boeing is drawing up a delivery schedule with many moving pieces. Among the complications it faces: lower-than-expected output for the 737, uncertain demand following months of bruising publicity and possible lags by international regulators after the U.S. government clears the plane to fly.

Instead of the previously planned 57-jet monthly output, Boeing will stay at its current 42-jet pace and gradually ramp up production of the Max to avoid stressing suppliers and overwhelming airlines at a time when they’re also taking the Max out of storage, Boeing Chief Financial Officer Greg Smith said at a Nov. 6 Baird conference.

The planemaker on Tuesday provided a glimpse into some of the activity as customers affected by the upheaval shift orders and strike deals. Air Lease Corp., the largest publicly traded U.S. aircraft financier, converted 15 of its Max orders to 5 of the carbon-composite Dreamliner, bolstering sales of the larger jet, Boeing spokesman Paul Bergman said by email.

Another unidentified customer removed three Max jets from its order book after buying three new 777 aircraft earlier in the year. Separately, an unidentified customer picked up future Max delivery positions from another buyer with no net order changes, Bergman said.

Boeing notched 20 deliveries in October, including 12 Dreamliners and one previous generation 737. Airbus SE, its European rival, delivered 77 jets last month. So far, Airbus has netted 542 orders this year to negative 95 for Boeing.

To contact the reporter on this story: Julie Johnsson in Chicago at jjohnsson@bloomberg.net

To contact the editors responsible for this story: Brendan Case at bcase4@bloomberg.net, Susan Warren, Richard Clough

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