Al Root

The world needs more planes. It's having trouble getting them.

Wednesday, Airbus reported third-quarter numbers. The results were fine. Its U.S.-listed American depositary receipts were up 3.1% at $39.23 in late trading, jumping about $1 after the results were released.

Airbus delivered almost 500 jets in the first nine months of the year and Airbus still expects to deliver 770 jets in 2024, and generate an operating profit of $6 billion.

That guidance, however, wasn't always the guidance. In April, Airbus expected to deliver 800 jets and generate about $7.4 billion in operating profit. Supply chain disruptions -- still left over from Covid-19 -- were the problem.

The 2024 delivery situation at Boeing is more severe.

Boeing has experienced years of struggle tied to design and production problems with the 737 MAX. As a result, it doesn't provide guidance. Wall Street still makes projections. At the start of 2024, analysts expected Boeing to deliver about 700 planes and generate an operating profit of about $5.5 billion, according to FactSet.

Now the estimates are 377 jets and an operating loss of more than $7 billion.

Those numbers mean 353 planes have vanished from delivery estimates. The number will creep higher the longer the Boeing labor strike that began on Sept. 13 goes on.

Boeing investors would love to see the strike end. So would Boeing customers.

Lower deliveries are doing more than costing Boeing and Airbus some $15 billion in annual operating profit. Only about 24,000 commercial jets are operating globally. The missing 2024 deliveries might end up equating to about 2% of total airline capacity.

That might not sound like a lot, but it's enough to affect airline capacity planning and, therefore, airfares. Exactly how much is hard to say. It will have to be figured out by economists looking into 2024 years from now.

Boeing stock was up 1.9% at $155.87 in late trading on Wednesday while the S&P 500 was flat and the Dow Jones Industrial Average was up 0.1%. Shares have been stuck between, essentially, $150 and $160 for weeks as investors wait for the strike to end and production to restart.

Write to Al Root at allen.root@dowjones.com

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October 30, 2024 15:16 ET (19:16 GMT)

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