Boeing orders down by almost 50% as 737 Max woes bite

Net orders, an indication of future demand, fell to 95 aircraft in the first quarter from 180 a year earlier and there were no new Max orders in March

A Boeing 737 Max 8, for China Southern Airlines. US plane maker received no new orders for the jet last month

Boeing said on Tuesday orders nearly halved in the first quarter and the plane maker handed over far fewer aircraft, as it struggled with the worldwide grounding of its best-selling 737 Max jets following two fatal crashes.

Net orders, an indication of future demand, fell to 95 aircraft in the first quarter from 180 a year earlier. There were no new Max orders in March, the company said.

The fall in order suggests that airlines had adopted a wait-and-watch approach as Boeing looks to ride out the worst crisis in its history.

Deliveries of the 737 planes fell to 89 in the first quarter from 132 a year earlier. Eleven Max jets were delivered in March, compared with 26 in February.

Boeing froze deliveries of the aircraft after a global grounding of the narrowbody model following the crash of an Ethiopian Airlines jet on March 10, killing all 157 people onboard.

The 737 Max, a new variant of the 737 family, is central to Boeing's future in its battle with European rival Airbus and the likely workhorse for global airlines for decades.

Boeing said at the weekend it is cutting production of its 737 jetliner for the first time since the September 11 attacks in New York as the plane maker works to limit financial damage from the global grounding of its newest and best-selling aircraft model.

By slashing output 19 per cent - to 42 airplanes a month by mid-April - Boeing will be able to reduce its spending on the 737 and preserve cash, according to Bloomberg. As work slows in a Boeing factory south of Seattle, two key suppliers, CFM International and Spirit AeroSystems, indicated they would continue full-tilt at the current record pace.

Also on Tuedsday, American Airlines trimmed its first-quarter forecast for unit revenue as it cancelled hundreds of flights during the period, mainly due to the groundings of its 24 Max planes, according to Reuters.

Shares of the airline fell 3 per cent after American said it now expects per available seat mile, a closely followed measure of airline performance, to be flat to up 1 per cent compared with the prior forecast of flat to 2 per cent growth.

The airline said it will extend cancellations of 90 flights a day until June 5, an indication that the Boeing aircraft may not return to service soon.

The carrier also cut its first-quarter outlook for margins, citing higher fuel prices. Excluding special items, the company now expects pre-tax margin to be about 2 per cent to 4 per cent, compared with its prior forecast of 2.5 per cent to 4.5 per cent.

Smaller rival Southwest Airlines was the first US airline to cut formally its financial outlook for the year after being forced to pull its new fleet of 34 Max planes out of service.

United Airlines and Air Canada had earlier warned of a hit to their businesses due to the groundings, with the Canadian carrier suspending its 2019 financial forecasts.