Boeing Shares Fall in Response to United Order Change
Jennifer Billock November 15, 2016
Due to a change in an order for United Airlines, Boeing shares fell on Tuesday.
United Continental Holdings, the parent company for United Airlines, announced earlier this week that it was delaying an order to wait for newer planes in the upcoming years. As a result, Boeing stock shares fell due to worries of lost production increases and revenue.
United originally had an order placed for 61 Boeing 737 jetliners, an order that would have brought in about $5 billion. But the airline decided to wait, and convert its order to the new 737 MAX models that they’ll receive in upcoming years.
Boeing noted that this order change will not negatively affect business—the company has more orders for standard 737s than it can meet at the moment, and Boeing still plans to increase production rates to ensure those orders are completed. There’s currently a backlog of 4,321 airplanes, Reuters reported.
“We’re excited that United will be adding even more MAXs to its future fleet, and we appreciate their confidence in the airplane,” Boeing spokesman Doug Alder told Bloomberg. “We constantly work with our airline customers to meet their evolving needs, and our healthy 737 backlog of 4,321 airplanes gives us the flexibility to meet those needs.”
According to Reuters, Boeing plans to increase 737 production rates to 57 per month in 2019. Currently the company is only producing 42 new aircraft per month.
On Tuesday, afternoon trading on the New York Stock Exchange showed Boeing shares down 1.3 percent at $148.98.
[Photo: WIKIMEDIA COMMONS]
