TLDR
- Shares of Boeing declined more than 2% Thursday following news that a significant Chinese aircraft order appears unlikely.
- Chinese orders currently represent merely 2% of Boeing’s order backlog, a dramatic decline from approximately 20% of deliveries during the 2010-2019 period.
- The aerospace manufacturer is prioritizing completion of its May contract for 200 aircraft over pursuing additional large-scale agreements.
- The upcoming Trump-Xi meeting will likely emphasize trade truce continuation, artificial intelligence protocols, and Taiwan rather than commercial aircraft purchases.
- Analysts project Boeing will ship over 800 aircraft in 2028, potentially producing approximately $10 billion in free cash flow.
Boeing shares tumbled more than 2% Thursday morning following reports indicating the forthcoming meeting between President Trump and President Xi Jinping would not likely result in a new Chinese aircraft purchase agreement. The stock traded down 2.3% at $195.07 during morning trading hours.
The aerospace giant has experienced challenging market conditions recently. Boeing’s shares were trading approximately 8% lower year to date and down roughly 7% over the trailing 12-month period prior to Thursday’s decline.
According to Reuters, two sources familiar with the discussions indicated that talks remain ongoing and subject to change. The company is reportedly concentrating its efforts on completing its May framework agreement covering 200 aircraft instead of pursuing a deal involving several hundred additional planes.
The May arrangement had been viewed as an opening move toward re-establishing Boeing’s presence in the Chinese market. New orders from Chinese carriers have been largely absent for the manufacturer since 2017.
During this period, Airbus has substantially increased its market share in the region. Industry projections from both major aircraft manufacturers suggest China will require approximately 9,000 new commercial aircraft through 2045.
Optimism regarding a more substantial order had grown earlier in the year following discussions among Boeing executives, Chinese officials, and U.S. representatives about a potential agreement encompassing as many as 500 planes. Boeing CEO Kelly Ortberg previously characterized the 200-aircraft deal as an opening installment, though he has subsequently tempered expectations for any larger follow-on order.
China’s Diminished Role in Boeing’s Portfolio
Chinese customers presently comprise only approximately 2% of Boeing’s total backlog of pending aircraft deliveries. This represents a significant contraction from the roughly 20% portion of deliveries that Chinese airlines constituted during the 2010-2019 timeframe.
Ordering activity from Chinese carriers has recovered somewhat following the pandemic downturn, though Airbus has secured the majority of this renewed business. Boeing has faced obstacles stemming from ongoing trade disputes and continuing repercussions from the 737 MAX safety crisis.
Some progress on the current agreement remains evident. U.S. Trade Representative Jamieson Greer indicated this week that approximately 140 orders are progressing well, with an additional 10 nearing completion.
One source informed Reuters that portions of the May framework could potentially be announced during the summit if contract documentation is finalized promptly. The United States and China have additionally agreed to a two-month extension of their trade truce beyond its November 10 deadline, according to Treasury Secretary Scott Bessent.
Boeing Stock’s Broader Outlook
The China situation represents just one element among numerous challenges Boeing currently faces. Manufacturing output levels, aircraft regulatory approvals, and fuel price fluctuations carry greater weight for the stock’s immediate trajectory.
Wall Street analysts forecast Boeing will deliver in excess of 800 aircraft during 2028. Such volume would generate approximately $10 billion in free cash flow.
Boeing last achieved deliveries exceeding 800 planes in 2018, the year preceding the second fatal 737 MAX accident, and has not reached that benchmark since. The stock declined recently after CEO Kelly Ortberg remarked during a September industry conference that 737 MAX production acceleration was proceeding gradually.
BofA analyst Ron Epstein characterized that decline as an “overreaction to predictable headwinds.” He noted that manufacturing difficulties should be anticipated considering the complexity involved in Boeing’s operational recovery.
Crude oil pricing represents another element affecting the stock’s performance. Boeing traded above $230 prior to the commencement of hostilities involving Iran, then declined below $190 in late March as petroleum prices surged.
Boeing continues working toward regulatory certification for its 777X and 737 MAX-10 aircraft models for commercial operations. The company’s aggregate backlog of unfilled orders currently stands at nearly 6,800 planes. Boeing did not provide a response to requests for comment regarding the summit report.
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