That means that Boeing now questions whether those sales will ever be completed because of sanctions.
Boeing still has more than 4,200 undelivered orders. Under U.S. accounting rules, Boeing regularly adds or removes orders from the backlog, but usually only when an order is canceled or the buyer’s financial problems put the deal in jeopardy.
This time, however, the company said Tuesday that about two-thirds of the 130 Boeing 737s that it removed from the backlog resulted from geopolitical reasons, including sanctions. The move suggests that 85 to 90 sales were, in effect, downgraded to questionable because of the sanctions.
Boeing did not identify the customers. The company previously indicated that it had undelivered orders for 34 planes with Russian carriers Utair and Volga-Dnepr and seven with SkyUp Airlines of Ukraine. A company spokeswoman said planes ordered by leasing companies but destined ultimately for a Russian airline were also removed from the backlog.
Cai von Rumohr, an aerospace analyst for Cowen, said Boeing has more pressing issues than losing Russian orders, including concern that inflation, higher oil prices, the war and COVID-19 could slow the recovery in air travel and hurt demand for new planes.
“Just losing Russia, if everything else is on track, is basically not a big deal because they have a great big backlog,” he said. “But Shanghai is in lockdown (because of coronavirus) and China traffic is down, so how many planes are they going to want?”
Boeing announced the backlog changes while reporting that it took 38 net new orders for planes in March, most of them single-aisle 737 Max jets. Los Angeles-based Air Lease Corp. placed an order for 32 Maxes.
The United States and its allies have been imposing steadily escalating sanctions on Russia since it invaded Ukraine in February.
Last week, Boeing’s European rival, Airbus, announced that it canceled an Aeroflot order for two planes. Airbus, which uses different accounting standards, still has an Aeroflot order for 13 planes and 14 planes for Russia’s Ilyushin Finance Co. in its backlog.
Sanctions have also forced Boeing and Airbus to stop providing aircraft parts and services to Russian airlines. Aviation consultant IBA said that Russian airlines will be able to cannibalize parts from their planes for a while, but the lack of spare parts will have “a significant impact” on them in six to 12 months.
Boeing shares rose less than 1% to close at $176.28.