Qantas Said to Halt Plane Deliveries From Boeing, Airbus Amid Travel Freeze
Qantas Airways Ltd (QABSY) said that it has informed Boeing Co (BA) and Airbus SE (EADSF) that it will defer the delivery of any new planes in the near term as it faces an unprecedented plunge in travel demand due to the coronavirus pandemic, Executive Traveller reported on Monday.
The airline will push back the delivery of three Boeing 787-9 aircraft which was expected to be received by the end of 2020. It had also planned to start taking delivery in August of the first of 18 Airbus A321neos due by 2022.
Qantas last week announced cash-preserving steps, including a pause on almost all capital and operating expenditure as well as implementing employee stand-downs, and raising $1.6 billion in loans against ten of its Boeing 787-9s.
Commercial airline travel has fallen off a cliff due to coronavirus-induced lockdown restrictions forcing many airlines around the world to ground the majority of their fleets and suspend aircraft deliveries. Boeing, which has seen jet orders canceled in the past few weeks, is cutting 10% of its workforce and announced reductions in its plane production rates as it braces for years-long industry recovery from the aviation crisis.
Shares in the planemaker dropped 3.5% to $138.66 in midday U.S. trading taking the year-to-date plunge to 61%. Airbus stock fell 4.1% to $58.50.
Wolfgang Donie, analyst at Norddeutsche Landesbank last week downgraded Boeing to Sell from Hold with a $110 price target.
TipRanks data shows that overall Wall Street analysts are sidelined on Boeing shares. The Hold consensus rating is based on 11 Holds and 5 Buys and 1 Sell. The $162.13 average price target implies 26% upside potential in the stock in the next 12 months. (See Boeing’s stock analysis on TipRanks).
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