The Boeing Company removed 210 aircraft from its order backlog and took an impairment charge over customer financing losses on Wednesday following the near-collapse of India’s Jet Airways. The adjustment pushed the world’s largest plane maker behind European rival Airbus in the race for business this year as both companies grappled with cancellations that outweighed new orders in the first quarter. Under recent changes in accounting rules, Boeing hives off orders that no longer meet its criteria for recognising revenue into a separate category, while defending contractual claims. As a result, Boeing’s net orders for the first quarter slid into negative territory, with a total of minus 119 net orders after cancellations, despite a slew of new wide-body sales. At the same time Airbus posted a negative total of 58 net orders over the same period.
Boeing finance director Greg Smith confirmed the adjustment was related to financial problems at Jet Airways, which halted all flight operations indefinitely on 17 April after its lenders rejected a plea for emergency funds.
Industry sources say customer finance arm Boeing Capital is carrying 75 narrow-body orders on behalf of Jet Airways in addition to 125 that the airline ordered directly from Boeing Commercial Airplanes. There have also been doubts over a 10-year-old order of 10 wide-body 787s. According to recent visitors to Boeing factories, at least one of Jet Airways 787s has already been built.