Boeing reported final order numbers and deliveries for 2019 Tuesday and they were as bad expected.
The company reported more cancellations than new business in 2019, and its order book for the troubled 737 Max shrank by 183 jets. Much of that was because of some overseas airlines, such as India's Jet Airways, going bankrupt, but with the troubled Max, there was little demand to make up for the lost orders.
The 777, which is seeing delays in the debut of the 777X version, also lost more orders than it gained. Even with positive orders for the 767 and 787 Dreamliner, Boeing's total orders for commercial jets last year fell by 87 jets.
Even without the impact of canceled orders, Boeing's new orders were sharply lower for the year, tumbling 74% to 243. Most of that was due to the 90% drop in orders for 737 models during the year. Boeing barely had any firm orders for the Max after the grounding in mid-March, but other models also suffered a 29% drop in new orders.
Deliveries also tumbled 53% to 380 from 806 a year earlier, due to the grounding of the 737 Max following two fatal crashes that killed 346 people.
That put Boeing far behind rival Airbus. Last week, Airbus reported record deliveries of 863 jets, up 8%, and orders up 2% to 768. This is despite the fact that Airbus had its own setback with the cancellation of the A380 jumbo jet early in the year.
Boeing had a particularly strong year in 2018 and it would have likely seen a slowdown in orders even without problems for the Max. Many airline customers had already placed orders for planes they will need for years to come. Boeing and Airbus both have a backlog of orders that would keep them working for years without any new orders.
What's no longer clear is how long Boeing will take to recover from this crisis.
Until recently, it had been widely assumed that Boeing would be able to bounce back quickly from the crisis once the Max was given approval to fly again.
Throughout 2019, it continued to build the 737 Max, albeit at a slightly slower pace. It ended the year with about 400 of the jets completed but not yet delivered. Delivering those planes could have allowed it to move back ahead of Airbus if it had been able to keep plane production going.
Last month it said it would temporarily halt production of the Max sometime in January for an undetermined amount of time.
While it's not furloughing or cutting its own workers, its largest supplier, Spirit AeroSystems, announced it would lay off 2,800 of the workers who build fuselages and other parts for the Max. Other suppliers also are expected to cut staff.
"That's the big concern," said Richard Aboulafia, aerospace analyst with the Teal Group. "They're going to need the suppliers. Ramping back up will only be as strong as their weakest link."
But suppliers like Spirit can't keep everyone on staff since it is likely to be shutdown even longer than Boeing.
Boeing had been buiding the 737 Max fuselages and other parts at the pre-grounding pace of 52 planes a month even though Boeing scaled back production to 42 planes a month. Boeing has about 100 of the fuselages and other Spirit parts waiting for it when it resumes production.
The Max accounted for more than half of Spirit's revenue, the company said when announcing its layoff. It also accounts for 10% or more of the revenue at seven other suppliers, according to credit rating agency Moody's. Moody's downgraded Spirit's debt into junk bond status Monday night.
Boeing's finances are in much better shape. But Monday, Moody's announced it is considering downgrading Boeing's credit rating, although it likely would still stay above junk bond status even with a downgrade.
"Recent developments suggest a more costly and protracted recovery for Boeing," said Jonathan Root, Moody's lead analyst for the company. He said that would mean "an ensuing period of heightened operational and financial risk, even if certification of the Max comes relatively near-term, as expected."