Boeing has been building up quite the stockpile of built but not delivered aircraft over the past year. While the bulk of these are the still-grounded 737 MAX, a significant number of 787 Dreamliners are also waiting to leave the manufacturer. Chairman of Air Lease Corp, Steven Udvar-Hazy, says it’s the biggest built inventory Boeing has faced in its entire 100-year history.
A huge built inventory
Back in July, FlightGlobal estimated that Boeing and Airbus combined had 628 commercial passenger jets, which had completed first flights but had not been delivered to customers. The vast majority of the stockpile is Boeing’s, with around 462 aircraft built and parked up.
Speaking to Aviation Week recently, Chairman of Air Lease Corp, Steven Udvar-Hazy, commented on the huge backlog of built but not delivered aircraft that Boeing faces. He said,
“The Boeing company faces the largest inventory of built new aircraft in its history of more than 100 years.”
Of course, a large number of these are the beleaguered 737 MAX, Boeing’s flagship narrowbody, which is still yet to be recertified. In June, Cirium data showed 423 737 MAX that were on Boeing’s built inventory, but of course, there has still been production going on since. The latest estimates are that around 450 MAX are ready to go, a number that is going to require a mammoth task to deliver to customers once the grounding is lifted.
Udvar-Hazy’s own company, Air Lease, has orders in for 126 737 MAX jets, as well as the 15 it had already placed with airlines prior to the grounding. As yet, ALC has not canceled any of its order, although other lessors have. Avolon removed 75 from Boeing’s order books, while GECAS pulled out of an agreement to take 69.
This adds to the strife for Boeing and presents a further issue for clearing this huge inventory of aircraft. Udvar-Hazy further commented,
“What we have today is a huge inventory of 737s that have been built, many of which have been legally cancelled. But Boeing has a tough time determining how many of those that are cancelled will be reactivated in due course.”
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Not only the MAX
Although the MAX makes up the bulk of Boeing’s built inventory, it’s not the only aircraft presenting a challenge to the manufacturer. Udvar-Hazy commented,
“It’s not only MAXs. There are also quite a few 787s that were built for certain customers … there’s an inventory of 787 that have been built that I wouldn’t necessarily call ‘white tails’, but they’re in a transition of not really knowing if they are they going to go to the original customer. Are they going to be bought by a lessor such as Air Lease and then redeployed somewhere else? Or is it a license for some of these airlines to renegotiate terms, not only on those whitetails but maybe other airplanes also.”
Demand for widebody aircraft is likely to remain low for some time, as airlines look to trim costs wherever they can and international travel demand sags. Back in June, Cirium information showed that, of 34 widebodies in storage at Boeing, two were 747s, one was a 767, five were 777, but there were also 31 787s.
It’s clear Boeing is having an issue with delivering these aircraft. While not a huge number of 787s have been canceled, airlines worldwide are dragging their heels on taking deliveries, with many looking to defer widebody arrivals for the time being. Udvar-Hazy summarized the situation saying,
“Inventory has been built and has been growing, and a number of cancellations can be seen literally every week. Boeing has to make some tough decisions, before the end of the year, on how to deal with this.”