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Boeing says 118 orders for 777X no longer firm under accounting rules

Stock MarketsFeb 01, 2021 10:15PM ET
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© Reuters. FILE PHOTO: Boeing stages the first flight of its 777X plane outside Seattle

(Reuters) - Boeing (NYSE:BA) Co said on Monday that 118 orders for its 777X widebody plane under development are no longer seen as firm under accounting rules that require it to regularly assess their viability, leaving it with 191 solid orders for the model.

Boeing last week announced a $6.5 billion charge on the 777X in part due to weaker-than-expected demand for the model. It also pushed back its entry into service by a year to late 2023 in anticipation of a longer, costlier certification process.

"Delays on the 737 MAX and 777X programs have resulted in, and may continue to result in, customers having the right to terminate orders and or substitute orders for other Boeing aircraft," the manufacturer said in a regulatory filing.

Customers for the 777X include Emirates, Qatar Airways, Etihad Airways, British Airways, Cathay Pacific Airways (OTC:CPCAY) Ltd, Singapore Airlines (OTC:SINGY) Ltd, ANA Holdings Inc and Lufthansa.

Boeing lists 350 orders on its website, although some customers have indicated they would like to reduce their orders or push back delivery dates as they grapple with a plunge in international travel demand due to the coronavirus pandemic.

At the end of 2019, Boeing had listed 309 of the 777X orders as firm, meaning it was confident customers still planned to buy that many planes and could finance their purchase.

Boeing Chief Financial Officer Greg Smith said last week on an earnings call that the company's order backlog had fallen during the fourth quarter of 2020 due to its accounting standard assessment, including the revised schedule for the 777X.

Boeing says 118 orders for 777X no longer firm under accounting rules
 

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