Boeing has disclosed that their orderbook for the 777X program has lost 118 firm orders, leaving the company with 191 left on the books. The announcement comes less than a week after the company reported a $6.5 billion charge on the program; their first delivery has now been pushed back to 2023.
In a Reuters article, it is explained that certain accounting rules have to be followed; which include regularly assessing the program for its viability. Any orders deemed at risk of falling through have to be removed from the books. Additionally, the recent delay in the program means customers are entitled to walk away from order contracts. Bloomberg reports that this contractual term is what caused Boeing to lose more than 1,100 737 MAX orders during its two year grounding.
Current Boeing 777X customers consist of All Nippon Airways, British Airways, Cathay Pacific, Emirates, Etihad, Lufthansa, Qatar Airways and Singapore Airlines. However, throughout the COVID-19 aviation downturn, various customers have held conversations with Boeing about reducing or deferring deliveries, until global travel demand starts to rise at least. Middle Eastern carriers hold the majority of the 777X orders, meaning any combined or individual loss could deal a major blow to the program.
Emirates, who holds an order for 115 777X aircraft, has previously signalled intentions to convert some of their order to smaller aircraft such as the 787 Dreamliner. Linus Bauer discusses why Emirates may choose the 787 Dreamliner over the 777X in his August 2020 analysis:
What was meant to be the ultimate replacement for ultra-large, quad-engine aircraft such as the Boeing 747 and Airbus A380, the 777X has now become an underlined example of COVID-19s aviation destruction. Competing widebody products from Airbus such as the A350 and A330 are also facing pressure, as airlines see the travel recovery starting with smaller and more capable aircraft. With the 737 MAX now in the air again and the A320neo continually boasting about its flexibility, the future of widebody aircraft will remain uncertain for at least the next few years.
Despite the multiple commercial program setbacks, Boeing remains confident the 777X will sell. Although, as the rejigged certification process takes place and COVID-19 continues to rage on, customers may further reconsider orders.