Boeing Hit by Qantas Cancellation
The recovery and consolidation of the airline industry since the recession has helped the sales of both Boeing Co. (NYSE: BA) and Airbus. But the momentum has started to shift the other way as high fuel prices and a slow economy trim carriers' earnings. Qantas cancelled $8.5 billion in Boeing plane orders. The company certainly will have to pay some penalty for that, but it is not the equivalent of what Boeing would have earned if it delivered the planes. Bloomberg reports:
Qantas Airways Ltd. canceled an order for 35 Boeing Co. 787-9s after posting its first annual loss in at least 17 years because of higher fuel costs, labor disputes and rising competition on international routes.
For the time being, the news is only slightly bad for Boeing, which still has tens of billions of dollars in backlog that will not be entirely whittled down for years.
Douglas A. McIntyre
Filed under: 24/7 Wall St. Wire, Airlines Tagged: BA