Boeing's Freighter Sales Surge Won't Last
The 737 MAX grounding and the COVID-19 pandemic have combined to crush demand for Boeing's (NYSE: BA) commercial jets since 2019. Freighters have been a rare bright spot for the company's commercial aircraft business. Supply chain bottlenecks and a sharp reduction in long-haul passenger flights -- which can carry a meaningful amount of belly cargo -- have driven up demand for dedicated freighters.
However, Boeing's recent level of order activity and deliveries in the freighter market doesn't look sustainable. An ample supply of used aircraft suitable for freighter conversion, rising competition from Airbus (OTC: EADSY), and new emissions regulations will cut deeply into Boeing's freighter business by the late 2020s.
The 737 MAX crisis decimated Boeing's narrow-body franchise. To be fair, deliveries have resumed and order activity has started to pick up over the past year. Nevertheless, Boeing 737 MAX deliveries continue to trail Airbus' A320neo-family deliveries by a wide margin, and the 737 MAX order backlog remains significantly smaller than it was a few years ago.
Source Fool.com
