What Prompted These Boeing Cancellations?

In the past week, Boeing (NYSE:BA) customers cancelled orders for six planes for a total worth of approximately $1.9 billion dollars, Reuters reported.

The majority of the cancellations came from the United Arab Emirates’ Dubai Aerospace Enterprise, or DAE, which withdrew five of the ten orders the company placed for Boeing’s 747-8 jumbo jets. However, DAE kept its order for seven 777 freighters on the aerospace company’s books. DAE, which struggled after the 2008 financial crisis hurt Dubai’s real-estate market, also pulled out on orders at Airbus. Even though Boeing has improved its jet’s fuel efficiency this year, rising fuel costs and the global economic downturn have made freighters less profitable for the company.

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Boeing received an additional cancellation for one 767 jet airliner from the Kazakhstan airline carrier Air Astana, which has also ordered three other 767s and three 787 Dreamliners.

This is not the first large-scale order retraction experienced by Boeing this year. During November, United Airlines (NYSE:UAL) scrapped orders for 15 single-aisle 737s, and so far this year, the company has received a little more than 100 cancellations. However, Boeing is still expected to record 1,052 net orders for 2012, far ahead of Airbus’ 650.

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