Boeing’s Slow Jet Sales Send Key Demand Measure to 2009 Levels

Boeing 737 MAX airplanes are seen parked in Seattle, Washington on Aug. 13. 

Photographer: David Ryder/Getty Images 

It’s still too early to sound an alarm about the health of the aerospace industry, but one key indicator is blinking yellow.

Slowing jetliner sales at
Boeing Co.
have sent its book-to-bill ratio, a measure of demand, plunging to levels not seen since the 2009 recession. Investors will be looking for insights into the outlook for commercial aircraft on Wednesday morning, when Boeing Chief Executive Officer Dennis Muilenburg makes his first public comments since the company reported second-quarter earnings in July.

Book to bill ratio is trending negative for the second straight quarter

The Chicago-based planemaker netted negative 85 aircraft orders this year through Aug. 31, as airline bankruptcies overseas wiped out sales gains and the worldwide grounding of its 737 Max in March was an added drag. The company delivered 276 aircraft over that stretch for a book-to-bill of -0.31, the first time that ratio has been negative in a decade.

Companies like to keep the measure at around one to replace the backlog they’re shipping to customers.

Boeing’s slump while its best-selling 737 model is sidelined is hardly surprising. Moreover, the ratio matters less for the company right now since it booked $474.3 billion in orders earlier this decade amid the largest sales boom in aerospace history — a backlog that equates to about seven years of production.

More worrying is that rival
Airbus SE
has just 95 net orders year-to-date, against 500 deliveries.

“If the results were just Max-related, you’d expect Airbus to be doing better, and they’re not,” said George Ferguson, an analyst with
Bloomberg Intelligence
. “It’s a sign of the times.”

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