- Boeing must sell 50 planes originally intended for China due to trade war challenges.
- The Chinese planes are worth more than $1 billion in revenue for Boeing.
- Restrictions from other countries would be a challenge for the aircraft industry, Boeing's CEO said.
Boeing is collateral damage in the US's trade war with China.
The American plane maker said it has about 50 planes that must be sold to other airlines. Chinese customers said they won't take deliveries because of tariffs.
"Right now, China's our only problem," Boeing's CEO, Kelly Ortberg, said on an earnings call on Wednesday. "We're going to work our tail off to make sure that China issue doesn't implicate our recovery."
Boeing's chief financial officer, Brian West, said that China made up 10% of the company's commercial backlog. He said Boeing is looking for ways to redirect its planes to places with more "stable demand."
The 50 planes bound for China are worth over $1 billion in revenue, West said.
Chinese airlines have returned two completed planes to the US, and there are plans to return a third one, Ortberg said on CNBC on Wednesday.
But years of delivery delays mean other customers are lining up.
The CEO of Malaysia Aviation Group — the parent company of the country's national carrier, Malaysia Airlines — told state media that it is talking with Boeing about taking over the delivery slots.
"We've really had a good start to the year, and I'm glad we put a conservative plan together that allows us to deal with the tariffs," Ortberg said.
Boeing reported $19.5 billion in first-quarter revenue, up 18% compared to last year. It narrowed losses to $31 million.
Boeing's stock closed 6% up on Wednesday.
Speaking to POTUS himself
Boeing executives expressed concerns about President Donald Trump's tariffs on the rest of the world, including about what happens if other countries follow in China's footsteps.
"I don't think a day goes by where we aren't engaged with someone in the administration, including cabinets, cabinet secretaries, and up to POTUS himself," Ortberg said. He added: "Aircraft are such a significant part of our trade surplus, and if we see markets closing that's going to be a big challenge for us."
The executives said that most of Boeing's supply chain is based in the US, and many of their Mexico and Canada imports have tariff exemptions. Still, they estimated that higher tariffs could cost the company $500 million annually.
Boeing is recovering from a series of hits last year, including a mass workers' strike and financial losses. Imposition on deliveries threatens its market share as it competes with Europe's Airbus and newer entrants from China.
