MIAMI – Boeing reported on Monday that 118 of its wide-body 777X order was no longer firm under accounting regulations. Therefore, Boeing has to determine its feasibility regularly, which left the company with only 191 finalized orders for the 777X.
Boeing revealed last week a US$6.5bn charge on the 777X, partially due to the weakest-than-expected demand for the model. Moreover, Boeing pushed 777X’s EIS until end of 2023, in expectation of a slower, more expensive and extensive certification process.
A Worst Year of All
“Delays on the 737 MAX and 777X programs have resulted in, and may continue to result in, customers having the right to terminate orders and or substitute orders for other Boeing aircraft,” the manufacturer said in a regulatory filing. 777X’s major clients are: Emirates (EK), Qatar Airways (QTR), Etihad Airways (EY), British Airways (BA), Cathay Pacific Airways (CX), Singapore Airlines (SQ), ANA(NH) and Lufthansa (LH).
Boeing’s website listed 350 777X, despite the fact that some airlines have declared they preference to decrease their orders or delay delivery dates. Mainly because they deal with a decline in international travel demand due to the pandemic.
However, at the end of 2019, Boeing had listed 309 firm orders of the 777X. This is to say that buyers were optimistic and already planning to buy and could fund their purchase.
Greg Smith, Chief Financial Officer of Boeing, said on an earnings call last week that the company’s order backlog had declined during the 4Q 2020 due to its accounting norm evaluation, including the updated 777X’s timetable.
Featured image: Boeing 777x final short in Everett Pain Field Airport (KPAE). Photo: Brandon Farris