Boeing is formally warning suppliers, investors and everyone else that escalating trade tensions between the U.S. and China—its largest single market—may soon threaten prospective aircraft sales, particularly those of the company’s lucrative twinjet 777 and 787 families.

Detailing the threat to an investor conference this month, Boeing Chairman, CEO and President Dennis Muilenburg said orders from China form a key element of Boeing’s planning for future production totals and assembly rates.

Speaking at Morgan Stanley’s annual Laguna Conference in California, Muilenburg said: “there is dependency there on Chinese orders ultimately coming through, so we’re paying very close attention to the U.S.-China trade deal. We’re still hopeful one will be struck and that airplanes will ultimately be part of that. But that’s a risk area until it’s finalized.”

In 2018, one out of four aircraft delivered by the manufacturer went to China. While the bulk of orders have been for 737s—1,200 have been delivered to date—Boeing is also banking on China’s appetite for widebodies to help sustain 787 production at the recently achieved rate of 14 per month. 

As of August, Chinese-based carriers had taken delivery of 97 777s and 94 787s, but they now have only 18 widebodies remaining in the backlog—12 787s and six 777s. A further 104 737 MAXs remain undelivered, some of which are already completed and stored pending the model’s return to flight.

Boeing aircraft account for more than 25% of China's total orderbook. 

 

Although China is actively developing its own C919 single-aisle aircraft and jointly working with Russia on the CR929 twin-aisle, Boeing is confident it can provide the country with a significant portion of the 7,700 aircraft it forecasts will be required over the next 20 years.

This is an abbreviated version of an article that appeared in Aviation Daily by Guy Norris.