Breaking News
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Coronavirus Crisis Hits Jet Makers: Boeing, Airbus In Focus

By Zacks Investment ResearchStock MarketsMar 09, 2020 10:28PM ET
Coronavirus Crisis Hits Jet Makers: Boeing, Airbus In Focus
By Zacks Investment Research   |  Mar 09, 2020 10:28PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items

Plummeting oil prices and ongoing coronavirus fears sparked recession worries among panic-stricken investors, resulting in a large amount of sell-offs on Mar 9, thereby causing the Wall Street to topple. Aircraft manufacturers - both commercial and defense - also felt the wrath of the turmoil.

Premier jet makers Boeing (NYSE:BA) and Airbus (OTC:EADSY) suffered the most. While shares of Boeing plunged 13.4% on Monday, the European aircraft manufacturer tumbled almost 10%.

Impact of Coronavirus Outbreak on Jet makers

The rapid spread of the epidemic outside China over the past few weeks has worsened the situation for global jet makers, since airlines have lowered aircraft orders for the time being. This has affected the order growth trend for the premier jet makers in the recent months and in turn forced a handful of them to cut down or even halt their production rate at some parts of their operation.

While the production halt is likely to weigh on future revenues, the plane makers are expected to incur expenses associated with the storage of the finished products whose delivery.

Due to drastic decline in passenger bookings following the spread of the virus, numerous flights have been cancelled across the globe. Leading airlines have been forced to cut down their capacity. Moreover, reduced flights indicate lower revenues from the services that these jet makers offer to the airlines.

Such a disruption in the aviation industry is likely to drag down earnings of aircraft manufacturers in the first quarter of 2020. A continuation of the same can be expected in the coming quarters as well since the virus continues to spread to different parts of the world.

Boeing & Airbus

Boeing was the biggest drag on the Dow Jones Industrial Average Index on Mar 9. While the coronavirus fear has been a major growth inhibitor, the Federal Aviation Administration's (FAA) rejection of the plane maker’s proposal regarding the wiring systems on its grounded 737 MAX aircraft also affected the stock.

Notably, this U.S. jet maker has already been struggling with the 737 Max issue and investors hoped that this plane’s return to service will revive Boeing’s commercial business. However, following the latest FAA decision, this seems farfetched. Moreover, the ongoing demand concerns due to the coronavirus outbreak have cast a shadow over order growth and timely delivery of other jet models of this aircraft manufacturer. Evidently, in January 2020, the company failed to generate any sales on account of zero orders.

Airbus, another prominent commercial jet maker, logged no orders in February, the first time in 13 months, as airlines held back on new commitments following the coronavirus crisis. Meanwhile, the European jet maker shut down a factory in China that accounts for almost 10% of the production of its most popular jet. Per a report by Reuters, Airbus trimmed A330 output in January and there is no indication of a reversal until 2021.

Another Stock in Focus

The coronavirus crisis hit military jet makers as well, especially Lockheed Martin (NYSE:LMT) . Notably, Lockheed Martin and Mitsubishi Heavy Industries MHVYF recently planned to shut down production at the F-35’s Final Assembly and Check-Out (FACO) facility in Nagoya, Japan for the week of 9-13 March due to fears of coronavirus contagion. While Lockheed has not yet stopped production at its Cameri facility situated in Italy, considering the rapid rate at which the disease is spreading in the country, a production halt in the coming days will not come as a surprise. Anticipating no near-term mitigation in the spread of this deadly virus, probable production halts may hamper Lockheed’s 2020 delivery targets and in turn weigh on its profitability. The company’s shares declined 8% on Mar 9.

Considering the aforementioned discussions and the rapid rate at which the coronavirus is spreading, investors will be keeping a close watch on these aircraft manufacturers.

Just Released: Zacks’ 7 Best Stocks for Today

Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.7% per year.

These 7 were selected because of their superior potential for immediate breakout.

See these time-sensitive tickers now >>

The Boeing Company (BA): Free Stock Analysis Report

Lockheed Martin Corporation (LMT): Free Stock Analysis Report

Airbus Group (PA:AIR) (EADSY): Free Stock Analysis Report

Mitsubishi Heavy Industries, Ltd. (MHVYF): Free Stock Analysis Report

Original post

Zacks Investment Research
Coronavirus Crisis Hits Jet Makers: Boeing, Airbus In Focus

Related Articles

Coronavirus Crisis Hits Jet Makers: Boeing, Airbus In Focus

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email