BOEING NUMBER TWO. Airbus to Overtake Boeing? By Todd Horwitz, Bubba Trading.

 

Airbus to Overtake Boeing?

Boeing Co. is poised to lose its place as the world’s largest plane maker to Airbus SE after a reign of seven years, as its jetliner deliveries fell by more than a third in the first half of 2019 with the grounding of its 737 MAX aircraft. 

The U.S. aerospace giant’s best-selling MAX has been barred by safety regulators from flying passengers for almost four months, far longer than Boeing, its investors and airlines expected. Consumers have expressed misgivings about getting on the plane again, and a dearth of new sales to carriers has helped drain about $50 billion from Boeing’s market value since it peaked in March.

The company’s delivery slump has reverberated across an aerospace industry that had been enjoying an unprecedented decade long boom. Some suppliers have been forced to trim output and idle staff, while airlines have had to cancel thousands of flights and seek compensation from the plane maker.

Plane deliveries are tied to company revenues and closely monitored by Wall Street. Leading analysts have slashed their profit forecasts for Boeing due to the 737 MAX crisis, which has halted deliveries and forced the company to store planes after they are manufactured. At the Paris Air Show in June, Boeing announced that it signed a letter of intent to sell 200 737 MAX planes to British Airways parent International Airlines Group. But the IAG order has not been officially booked yet.

On Monday, Saudi budget carrier flyadeal said it withdrew a provisional order for up to 50 Boeing’s grounded 737 MAX jets and would instead buy up to 50 Airbus planes. Morningstar analyst Danny Goode said he does not expect other carriers to follow flyadeal as long as Boeing is able to ensure reentry of the 737 MAX by the end of the year.

“While flyadeal’s withdrawal is a bit concerning, we would seriously revisit our delivery forecast if a flagship customer like Southwest or Ryanair flipped to Airbus’ A320neo or A220 platform,” Goode said in a note. “We remain confident in the 737 MAX’s return to service.”

Boeing has developed a software upgrade to the 737 MAX after problems with a flight handling system were tied to Lion Air and Ethiopian Airlines crashes. But the jet has still not been cleared by regulators to resume work.

Keep those stops tight


Todd “Bubba” Horwitz

BubbaTrading.com 
HighSchoolInvesting.com

Financial Markets and Political Commentary
 

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About the author

Todd Horwitz - Author of “Average Joe Options“. Todd began his trading career in 1980 at the CBOE. He was one of the original traders in the OEX & helped start the SPX. He is a member the CME where he trades S&P futures as well as foreign currencies & is a regular contributor to CNBC, Bloomberg, BNN, Fox & many other major news networks.