Why Boeing Will Have a Hard Time Getting Out of the Crisis Even with a Record $96 Billion Qatar Deal

Boeing has secured its biggest plane order yet: Qatar Airways has agreed to buy up to 210 wide-body jets, including the 787 Dreamliner and 777X, in a deal worth $96 billion. President Donald Trump has been quick to declare it a victory and credit his entire visit to the Middle East for the success, Bloomberg reports.

However, analysts say Boeing will have a hard time getting out of the crisis even with such a record deal. For example, the White House said the deal was worth $96 billion. But it is common knowledge that customers negotiate big discounts, especially on such large orders.

Firstly, the order will not be completed in the coming years, but rather in a decade at least, which means that the current negative factors will continue to impact the financial condition of the aircraft manufacturing company.

Second, competitors are still trying to erode Boeing’s market share in the company’s traditional region. That’s Europe’s Airbus. Qatar has long been a loyal Boeing customer, although the carrier also uses a large fleet of Airbus SE for short- and long-haul flights. Wide-body jets have seen a surge in demand since the pandemic, as global routes have reopened and airlines have sought to replenish their aging fleets.

Third, many experts call the new agreement not a deal with specific commitments, but rather a protocol of intent. The White House was so eager to bring at least something to the United States from the Middle East that it did not demand clear commitments other than a promise backed by nothing.

So don't expect the deal to be a panacea for the American aircraft manufacturer. Qatar Airways operates a mixed fleet of more than 200 narrow-body and wide-body aircraft from both manufacturers. And the kingdom will replace its aging fleet through cooperation with both aircraft manufacturers.