Airbus, Boeing deferrals may indicate slowing global economy

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Introduction

Boeing 737 flightline at Boeing Field: 737s awaiting delivery. Seattle Times photo via Google images.

Boeing 737 flightline at Boeing Field: 737s awaiting delivery. Seattle Times photo via Google images.

Nov. 17, 2016, © Leeham Co.: The deferral by United Airlines of 65 Boeing 737-700s announced Tuesday caused some observers to conclude this has a negative impact on the manufacturer, but this may well overlook a larger issue.

UAL is the latest “quality” airline to announce deferrals to reschedule capital expenditures or because of not needing the aircraft now.

Softening yields, particularly among US airlines, indicate over-capacity despite load factors of 85% or more, say industry observers.

While the backlogs of Boeing and Airbus remain solid today, do the actions of several major airlines indicate the leading edge of a global economy that’s beginning to soften?

Summary

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