Boeing reported new aircraft orders at a total of 9 in May. Two were to domestic buyers and 7 were to unidentified buyers. It is interesting that the 2 domestic buyers were FedEx and UPS. It provides a hint of where demand for new aircraft could trend in the COVID-19 pandemic world – instead of air passenger travel expanding, it will be among air freight carriers as consumers and businesses make increasing use of online providers of goods. Unidentified buyers tend to be government military purchases where demand is less about the economy and more about national defense.
Boeing has definitely felt the impact of the pandemic and the deep recession brought on by public health measures. However, it was already doing poorly in the wake of the 737 MAX air disasters that were exacerbated by revelations of corporate indifference to reported problems with the design and function. For the January-May period, 2020 has seen only a meager 58 orders in all that have been more than wiped out by 322 cancellations related to the 737 MAX and the recession. Order backlogs are greatly reduced with little prospect of a turnaround any time soon.
The advance report on new orders for durable goods in May at 8:30 ET on Thursday, June 25 should see a relatively large percentage gain in transportation. This should include a mild increase for new motor vehicles. However, this is only because Boeing had 9 new orders in May after 0 (zero) in April and sales of motor vehicles improved enough in May to reduce inventories and get production going for the new model year. The dollar value of orders is still going to be well below readings as recently as February.
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