Russian Sanctions Stall Boeing Sales Of 141 Planes

 

In a recent incident, Boeing has decided to remove 141 planes from its order backlog. The geopolitical situation including the restrictions on sales due to the current situation in Russia and sanctions like those imposed on Russia for its war against Ukraine.

The big question in front of Boeing management is whether they will ever be able to sell those planes, stalled due to sanctions.

Their current order backlog is 4200 planes. As per the U.S. accounting rules, Boeing regularly can add or remove orders from the backlog, this happens only when a order is cancelled or the buyer's financial problems put the deal in jeopardy.

As per a statement by company representatives, the reason for cancellations now is geopolitical. About two third of the 130 Boeing 737s that it removed from the backlog resulted from geopolitical reasons, including sanctions. At present 85 deals out of 90 are affected due to sanctions.

Without revealing the final customer’s name, the spokesperson shared that Russians carrier Utair and Volga-Dnepr have a pending order of 34 planes, where-as Sky Up Airlines of Ukraine has 7 planes. The planes were ordered by the leasing companies but the sale didn’t get concluded as these were destined to Russia.

Boeing has a history of selling planes to Russia in multiple orders. They have sold 86 planes to Russian companies in past. Utair has purchased 30 planes so far from, where-as leasing company Sberbank has purchased 22 and six by Aeroflot, the nation's flag carrier.

With the scale of business with Russia, Boeing has a large exposure to Russia. Boeing doesn’t allow to identify buyers, and Russian airlines get many of their planes from European and U.S. leasing companies — who are now scrambling to get their planes back from Russia.