Boeing Co cutting orders for pressurized doors was worth less than NT$100 million (US$3.24 million) and would have limited effect on profits, Aerospace Industrial Development Corp (AIDC, 漢翔航空) said yesterday.
The reduced orders to AIDC, which has been manufacturing pressurized doors for Boeing 737 jets since 2003, this month were not as big as the company was expecting, AIDC senior vice president Serena Huang (黃淑媛) told an investors’ conference in Taipei.
“We were worried that Boeing would cut orders of Leap engines, which power Boeing 737 MAX aircraft, but thankfully, the orders were unchanged,” Huang said.
AIDC has been manufacturing Leap engine cases for CFM International, co-owned by General Electric Co and Safran Aircraft Engines, since 2013.
The company said the engine orders offer higher profit margins than orders for other products.
It had received a letter from Boeing saying the orders for Leap engines would be unaffected by the Seattle-based company’s plan to cut production of 737 MAX aircraft, as there has been a shortage of the engines since 2017, AIDC chairman Hu Kai-hung (胡開宏) said.
Boeing on Friday last week announced that it would cut the production schedule of its 737 aircraft line following two crashes that have seen the 737 MAX grounded worldwide.
Boeing has continued to manufacture 737s since the March 10 Ethiopian Airlines crash that killed 157 people, the second deadly crash in five months after a Lion Air crash killed 189 people in October last year.
As AIDC’s revenue and net profit for last year hit records of NT$28.18 billion and NT$2.09 billion respectively, the company is not worried that Boeing’s lower orders for doors would affect its profits for this year, Hu said.
“Although Boeing’s production cuts are temporary, we have set up a task force to control risks and weather potential headwinds,” he said.
Last year, orders from Boeing and Boeing’s suppliers accounted for 3 percent of AIDC’s revenue, the company said.
AIDC is to finish building a prototype of an advanced trainer jet in September and deliver 66 military aircraft to the government from 2023 to 2028, it said.
The military aircraft sector accounted for 56 percent of its revenue last year, AIDC general manager Ma Wan-june (馬萬鈞) said.
Additional reporting by AFP
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