Boeing might lose 90 orders because of war in Ukraine
Seattle-based mega-plane maker Boeing Aircraft Co. announced that 90 orders are in danger of being canceled due to geopolitical tensions from the crisis between Russia and Ukraine. Last Tuesday, April 12, Boeing said that they are not canceling any orders yet but are in an “accounting limbo” that is used when orders are not yet firm.
The company disclosed Tuesday that it added 141 jets to that accounting classification for the month of March. Two-thirds of those orders, or more than 90 jets, are for Boeing 737 MAX planes that were affected by the war in Ukraine and its resulting economic sanctions.
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The company has seen an increase in orders that were added to this accounting limbo in the past two years, the main reason has been the pandemic and the low demand for new aircraft in the last two years. Counting the jets added in March, Boeing’s list has a total of 950 commercial jets with uncertain status, leaving Boeing with a backlog of 4,300 jets to build.
The sanctions imposed on Russia prevent the sale of Western aircraft to the Eastern European country. Along with the sale of aircraft, the sale of spare parts needed to keep Russia’s aircraft fleet in an operational status has also been banned, so it’s no surprise that companies are wary of any business dealings with Russian customers.
Even if the sanctions are lifted, the relationship between Russia and the aircraft leasing companies will likely be permanently damaged by the Russian government’s order to nationalize and take possession of hundreds of aircraft owned by the leasing companies. American companies mustn’t be affected by war sanctions so it remains to be seen if the Biden administration picks up the ball in the form of tax breaks for Boeing.