News: Boeing has a huge dilemma. The company has produced about 820 737 MAX aircraft that are currently on the ground and not flying. About 370 were delivered to customers and paid for, awaiting clearance to re-enter service, and about 450 were built by Boeing during the time the aircraft was grounded, before the COVID-19 crisis that devastated aircraft demand. Boeing would like to deliver and get paid for those aircraft as well, but it is unlikely to happen in the near term. Today, the industry is well over capacity, with airlines grounding massive numbers of aircraft, and there is virtually no demand for any of the 820 737 MAX aircraft currently sitting on the ground. Most industry crises over the last few decades have been regional in nature, but this one is impacting the entire globe. The problem is that Boeing has a supply chain it needs to protect, and factories that need to continue to build additional new airplanes. Airbus is planning to cut production by about 1/3rd from 2019 levels. Boeing, with a year’s worth of airplanes in a normal year on the ground, can’t afford to build as many aircraft which will likely be produced at only a small fraction of its capacity when production resumes later this year (hopefully).

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