Aviation

Dubai aircraft lessor slams Boeing for delivery delays

By Pramod Kumar

May 2, 2024

737 Max aircraft under construction at the Boeing factory in Renton, Washington. Dubai aircraft lessor DAE wants Boeing to 'get their act together'

DAE only expects half of 2024 order
One aircraft delivered this year
Ratings agencies downgrade Boeing

Aircraft lessor Dubai Aerospace Enterprise has criticised troubled US manufacturer Boeing for its failure to deliver the promised amount of aircraft.

DAE’s CEO Firoz Tarapore said it is likely to only receive around half the number of aircraft from Boeing this year than the planemaker had originally committed to deliver.

“The only thing we can reliably expect from Boeing these days is a delivery delay notification as opposed to aircraft, so we hope that they get their act together,” Tarapore said on an analyst call, cited by Reuters.

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DAE is one of the world’s top 10 lessors with a 500-strong fleet of owned, managed or ordered aircraft. It said Boeing had delivered just one aircraft in the first quarter with up to four expected in the second quarter.

The company announced a year-on-year 9% increase in total revenue to $343.6 million during the first quarter of 2024. Profit before taxes was $69.7 million, compared to $73.5 million during the same period a year ago.

“Our order book positions until 2026 are committed on long-term leases to top rated airline customers,” said Tarapore. “Cash flow from operations increased by 14% and our available liquidity climbed to $5 billion.”

Boeing has been under heavy scrutiny since January after a section of fuselage blew out on an Alaska Airlines-operated 737 MAX 9 flight mid-air, forcing an emergency landing.

Last week ratings agency Fitch downgraded its outlook on Boeing to “negative” from “stable”, as the fallout from the safety crisis continues to impact the company’s production and cashflow.

Fitch, which reaffirmed its “BBB-” long-term issuer default rating, said it could stabilise the outlook if Boeing liquidates over 100 of its pre-2023-built 737 MAX and half of its 787 inventories by early 2025, along with increasing production of its MAX jets towards 38 per month.

Fitch’s downgrade follows similar moves by S&P and Moody’s earlier last week on Boeing’s bumpy cashflow.