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Boeing Orders Fall Short of 2016 Target

Boeing sales fall short of 2016 predictions. Boeing sales fall short of 2016 predictions.

Boeing Co fell 80 planes short of its goal for new orders in 2016, but likely clinched the title of world’s biggest planemaker for another year.

Boeing said it delivered 748 jetliners last year and booked net orders for 668 aircraft worth about $94 billion at list prices. Boeing had predicted orders would roughly match deliveries, which it forecast at between 745 and 750 planes, Reuters reported on January 7.

Boeing’s delivery total likely means the Chicago-based aerospace and defense company beat European rival Airbus on output. Airbus has forecast at least 670 deliveries in 2016, and is due to report totals on Wednesday.

Airlines have slowed their shopping for jets, especially large widebody models, causing Boeing’s “book to bill” ratio of new sales to deliveries to fall to its lowest level since 2004.

Even so, Boeing’s orders fell less than expected, suggesting aggressive sales campaigns at yearend, analysts said.

  737 MAX Factor

Airbus has a price advantage thanks to the strong US dollar, putting pressure on Boeing’s sales team.

Boeing’s deliveries also slowed as the company began building the new 737 MAX narrowbody at its factory in Renton, Washington. The first MAX planes take longer to assemble than older 737 models, and cannot be delivered until Boeing finishes flight tests and gets government certification.

Deliveries likely will rise this year as MAX planes that welled up in inventory are delivered. But the gain will be tempered by a 40% cut in production of 777 widebodies. Analysts expect 777 deliveries will fall to 3.5 a month in 2018, from 8.3 currently, as the successor 777X model enters production.

The final days of 2016 marked a busy time for Boeing’s new sales chief Ihssane Mounir. The sales force booked 198 net new orders since December 20, including 189 orders from unidentified customers. The tally did not include any of its pending orders for Iran, the company said.

The total included 194 orders worth about $21 billion at list prices for Boeing’s 737 MAX.

The new tally lifts Boeing’s total backlog to 5,715 commercial jets, equivalent to about seven years of production, the majority of which are 737 planes.

 

 

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