Boeing looks to new customers for China-slated aircraft

Boeing had intended to deliver fifty aircraft to customers in China in 2025 but is now pivoting to find other buyers for those planes should the Chinese customers remain unable to accept delivery. Boeing reported a strong first quarter for 2025 today, but the main concern on the horizon is the trade war between the United States and China. Following a tit-for-tat escalation, the U.S. has imposed a 145% tariff against China and China has imposed a 125% tariff against the U.S. This month, China also told Chinese carriers to halt new Boeing aircraft deliveries . [caption id="attachment_57148203" align="aligncenter" width="1042"] Boeing will terminate production of the 767-300F after the final delivery in 2027 . (Courtesy/Boeing)[/caption] “I expect the China situation will take away some of the headroom we've built with our strong first-quarter deliveries at [Boeing Commercial Airplanes,” Chief Executive Kelly Ortberg said on today’s earnings call. “We continue to work this situation proactively with the [Trump] administration, and it's clear that they understand the importance of the aerospace industry to the U.S. economy and the role that Boeing plays as a top U.S. exporter.” Of the orders for seventy-eight 777Fs on Boeing’s backlog as of March 31, two are identified as being for China-based carriers: One for Air China Cargo; and One for China Cargo Airlines. However, there are more 777Fs attributed to unidentified customers that Cargo Facts believes were destined for Chinese operators. China Cargo previously told Cargo Facts that it planned to add four more production freighters in 2025. HNA subsidiary Suparna Airlines’ order for up to ten 777Fs could be among the twenty-six aircraft due for unidentified customers. Tariffs, reciprocal tariffs, retaliatory tariffs The blanket 10% tariff imposed by the U.S. on all other countries — except Canada, China and Mexico, which face different tariffs — and the threat of reciprocal tariffs will affect Boeing in two areas: the increased cost of importing parts and the impact of retaliatory tariffs, Ortberg said. “The input tariffs incurred in the first quarter were immaterial, and we really didn't see any impact to deliveries in the first quarter,” Ortberg said. “Much of our supply chain is based in the United States, and many of our imports from Canada and Mexico are exempt under the United States-Mexico-Canada Agreement. “We do have suppliers in countries subject to the new U.S. tariffs, most notably in Japan and Italy, where our suppliers do significant structures work on our widebody airplanes,” he said. “We are currently paying the 10% tariff on those components, but we should recover tariff costs for those aircraft that are subsequently exported, which is a large portion of our widebody [aircraft].” The other concern is retaliatory tariffs. “The only region that we have an issue with aircraft delivery today is China, and, due to the tariffs, many of our customers in China have indicated they will not take delivery,” Ortberg said. “We have approximately fifty China deliveries in our plan for the balance of the year. We're in close communication with our China customers, and we're actively assessing options for remarketing already built or in-process airplanes. “For the nine airplanes not yet in the production system, we're engaged with our customers to understand their intentions for taking delivery and, if necessary, we have the ability to assign those positions to other customers,” he said. Boeing is in daily contact with the Trump administration, including Cabinet members and even President Donald Trump, Ortberg said. “China's our only problem and ... we're going to work our tail off to make sure the China issue doesn't implicate our recovery and particularly our stability in our production system,” he said. “Customers are calling asking for additional airplanes. So, this is really going to be just a short-term challenge for us to either have China reverse course and take the airplanes, or get us in a position to remarket those airplanes.” 18% YoY increase in revenue Boeing reported $19.5 billion in Q1 revenue, a 17.7% year-over-year increase. The company’s revenue from its Commercial Airplanes business increased 75.1% YoY to $8.1 billion, after the company delivered 130 new aircraft — a marked increase from the eighty-three delivered in Q1 2024. According to Boeing’s delivery log as of March 31, of those 130 aircraft, nine were freighters: One 777F to Air China Cargo; Two 777Fs to China Southern Airlines; One 777F to CMA CGM; One 777F to DHL Aviation Americas; One 777F to Ethiopian Airlines Group; One 767-300F and one 777F to FedEx Express; and One 767-300F to UPS. Boeing saw its total number of gross orders for production 777Fs increase to 400 in March and has no more production slots for the type, multiple industry sources have told Cargo Facts . Boeing will terminate production of the 767-300F after the final delivery in 2027 and has delayed the entry into service of its new 777-8F from 2027 to 2028, Ortberg announced in October. Boeing’s Global Services business reported $5.1 billion in Q1, essentially unchanged YoY. In the quarter, Global Services delivered its 100th 767-300BCF . The 2001-vintage, CF6-powered unit 30048 (ex-Condor) was delivered to SF Airlines in February. Boeing also reported in Q1: EBIT of $76 million, an improvement from Q1 2024’s EBIT loss of $378 million; Net loss of $31 million, an improvement from Q1 2024’s net loss of $355 million; and A diluted loss per share of 16 cents, an improvement from Q1 2024’s diluted loss per share of 56 cents. The planemaker had a rocky 2024 as it sustained a two-month machinists strike and the FAA enhanced its oversight of Boeing’s production facilities following the January 2024 incident in which a fuselage panel blew off a 737 Max 9 shortly after takeoff. Boeing also announced April 22 that it will sell portions of its Digital Aviation Solutions business, including its Jeppesen, ForeFlight, AerData and OzRunways assets, to software investment firm Thoma Bravo for $10.6 billion cash. Shares of Boeing ( NYSE: BA ) were up 5.95% from market open to $172.19 as of market close today. Boeing has a market capitalization of $129.5 billion. Register now for Cargo Facts EMEA, an essential regional event for industry stakeholders, on May 6-8 at the Shangri-La Bosphorus in Turkey.

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