MIAMI — A small positive order book progression emerges for Boeing this week at the Singapore Air Show with leasing company BBAM placing an order for three 737-800 Boeing Converted Freighter (BCF) aircraft.
Commenting on the deal was Steve Zissis, President and CEO of the leasing company, who expressed the benefits of this freighter program:
“Through the Boeing freighter conversion program, these 737-800s will continue to deliver value for our customers and investors for many years to come”.
“The 737-800 is an integral part of BBAM’s managed fleet of commercial passenger jet aircraft, and we see strong interest from our customers in the standard-body freighter. We chose Boeing’s conversion program because we believe it maximizes the platform’s capability and reliability”, he added.
Also commenting on the deal was Ihssane Mounir, Boeing’s Senior VP of Commercial Sales and Marketing, who in turn praised the company for placing the order.
“BBAM is one of the world’s leading leasing companies, known for its smart approach to investment. We are delighted that BBAM has selected the Boeing Converted Freighter program to extend the life of their Next-Generation 737s and capture a new market opportunity in the years ahead”.
“This agreement shows how we can serve our customers by delivering efficient and reliable airplanes and a portfolio of services that extracts value throughout the life of those jets,” said Mounir.
It is currently unclear which customer will receive the new aircraft; delivery dates are also not clear at this time.
A new 737-800BCF production plant
This order announcement came alongside plans for a new 737-800BCF production plant at Guangzhou Aircraft Maintenance Engineering Company (GAMECO) in the summer of this year.
This is in response to Boeing’s Commercial Market Outlook, which predicts 2,820 freighters will be required to meet market demand, 1,220 being the standard-body passenger-to-freighter conversion number.
The 737-800BCF is designed to carry up to 23.9 metric tons of cargo, with Boeing advertising it as an aircraft “with excellent operating economics to maximize operators’ profits”.
A small change for the better
On January 29 of this year, Boeing reported its first annual loss since 1997, a sign of continued trouble resulting from the 11-month grounding of the Boeing 737 MAX last March after two crashes that resulted in 346 deaths collectively.
Since then, the manufacturer has been struggling to regain the trust of regulators and global travelers as the model’s return to service date continues to be pushed back.
Therefore, it is a continued breath of fresh air for BBAM to place an order for the 737-800BCF, which now brings the total order count of the type to 130 since its release.
Boeing reported a $2.4 billion cash outflow in 2019 as opposed to the $15.3 billion net cash inflow reported in 2018. Annual revenue declined from $101.1 billion in 2018 to just $76.6 billion in 2019. Core earnings per share also dropped from $16.01 in 2018 to -$3.47 in 2019.
The annual report cited that the MAX grounding has cost Boeing over $19 billion since last March, with costs of roughly $4 billion from this year alone.