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Boeing production plummeted in 2020

Boeing 787's in different stages of completion. (Mike Siegel/Seattle Times/TNS)

A devastating 2020 for Boeing production ended in December with a small lift for its workforce producing 737 MAX jets in Renton, Wash., but another blow to those building 787 Dreamliners in Everett, Wash., and North Charleston, S.C.

After the Federal Aviation Administration (FAA) ungrounded the 737 MAX in mid-November, Boeing managed to deliver 27 of the jets out of Renton in December, the first deliveries since the second MAX crash in March 2019.

For the second month in a row, however, Boeing in December delivered zero 787s.

After a bad 2019, when Boeing was unable to deliver the 737 MAX from early March, last year proved much worse.

The MAX remained grounded until close to the end of 2020 and the coronavirus pandemic’s paralysis of air travel forced Boeing to cut production of all the other jets.

Manufacturing flaws that showed up in the 787 last year completed the misery.

Engineers and mechanics are still struggling to inspect for and fix manufacturing-quality defects that potentially weaken the fuselages of 787s that have piled up outside the factories in Everett and North Charleston.

In a statement Tuesday, Boeing chief financial officer and executive vice president Greg Smith said the inspections “represent our focus on safety, quality and transparency” and are intended to ensure the long term health of the 787 program.

The 787 and the MAX should have been the two highest volume production programs.

Boeing’s 2020 jet order and delivery figures, released Tuesday morning, reveal the damage.

Boeing hurting more than Airbus

The U.S. aerospace leader delivered just 157 jets last year, down from 380 jets delivered the previous year and from a record 806 jets delivered in 2018, the last year before Boeing’s world collapsed.

The last time production was that low was during the Boeing Bust in the early 1970s, a time when an infamous billboard declared: “Will the last person leaving Seattle please turn out the lights?”

In 1973, Boeing delivered 156 airplanes, just 97 in 1972 and 141 in 1971.

In addition, Boeing’s unfilled-order backlog shrank by more than 1,000 aircraft in 2020 as customers canceled 641 orders for the MAX and more than 500 further MAX orders were deemed no longer solid enough to include in the official order tally.

The pandemic meant 2020 also was a very difficult year for Boeing’s European rival Airbus. But without the millstone of a grounded single-aisle jet to hold it down, Airbus weathered the aerospace business storm much better.

Before the MAX crisis, Boeing outproduced Airbus for seven straight years and claimed the title of world’s largest airplane manufacturer from 2012 through 2018.

But with the high-volume, single-aisle jets — Boeing’s MAX and Airbus’ A320 — accounting for the majority of airplane production, for the past two years the European manufacturer has easily outpaced its U.S. rival and taken that crown.

In 2019, as the airline industry boomed, Airbus set another high and beat Boeing’s record, delivering 863 commercial planes.

In 2020, though the pandemic slashed Airbus deliveries by 34%, it still outproduced Boeing by more than 400 airplanes.

Airbus delivered a total of 566 jets in 2020. Of those, 484 were single-aisle A220 or A320 jets.

Boeing’s total of 157 deliveries included a meager 43 single-aisle jets, adding two older model 737-800s and 14 military P-8 anti-submarine aircraft to the 27 MAXs.

The MAX crisis over the past two years means Airbus has outproduced Boeing in 11 years out of the past 20.

And while the Boeing order backlog shrank in 2020 by 1,026 airplanes, the Airbus net order tally grew by 268 airplanes.

The U.S. planemaker may take years to recover its position from the staggering hits to its business and its reputation.

Looking ahead

Boeing’s hope for a better 2021 lies in the resumption of MAX deliveries. After United flew the first one on Dec. 8, Boeing quickly stepped up the pace.

By year’s end it had delivered 10 MAXs to American Airlines, eight to United and nine more to various leasing companies.

December also saw Ryanair order 75 more MAXs along with seven MAX orders for unidentified customers. (Alaska Airline’s order for 23 more MAXs, though announced in December, will be finalized this month.)

However, leasing companies canceled another 105 orders for MAXs in December.

The 737 MAX finished 2020 with a much-diminished unfilled-order backlog of 3,282 airplanes. Airbus data released Friday shows it ended 2020 with a backlog for its rival A320neo family of 5,833 airplanes.

Another glimmer of hope for Boeing is that last year it delivered more large widebody jets than Airbus, 114 of those more expensive jets to just 82 for the European planemaker.

That edge was partly because of Boeing’s dominance of the large cargo jet market, with its 767, 777 and 747 freighters. In December, cargo carrier DHL placed a hefty order for eight big 777 widebody freighters, worth about $1.3 billion based on estimated market pricing from aircraft valuation firm Avitas.

And 787 production also contributed to Boeing’s lead in widebody jet production, before those deliveries ground to a halt in November.

Following those troubles though, orders for two 787s were canceled in December.

For Airbus, the all-composite A350-900 is proving its most successful big widebody jet. It is already proving a challenge to sales of the 777, which has faded fast as Boeing’s star passenger plane.

While Boeing delivered 22 cargo models of the 777 last year, it delivered only four of the passenger version. And 777 net orders for the year, even with the cargo model orders, came out at minus 1.

Already way behind Airbus in the smaller-jet market, Boeing must get the 787 back on track this year if the company is to hold onto its traditional lead in the market for bigger, long-haul jets.

Furthermore, it must hope that the international travel market has returned by the time the giant 777X enters service, likely now delayed until 2023.

“As we continue navigating through the pandemic, we’re working closely with our global customers and monitoring the slow international traffic recovery to align supply with market demand across our widebody programs,” said Smith.

Boeing will report its 2020 earnings on January 27, detailing the financial carnage that flows from this delivery data.

Financial analyst Dhierin Bechai this month projected that the problems with 787 production may trigger an accounting write-off.


© 2021 The Seattle Times
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