What happened

Shares of Boeing (BA -2.20%) traded down nearly 5% on Thursday on signs that demand for wide-body aircraft could be falling. Sales of Boeing's wide-body 787 Dreamliner have helped cushion the company during the 737 MAX grounding, and Boeing can ill afford to see demand for one of its most important products fall off a cliff.

So what

Boeing and rival Airbus (EADSY -1.44%) enjoy bulging order books for their single-aisle, or narrow-body, 737 and A320 aircraft, but the market for wide-body aircraft -- planes with two aisles -- was shaky even before the COVID-19 coronavirus cut into travel demand. In recent days, there have been signs that the fall in demand for wide-bodies is accelerating.

A 787 flies over an industrial setting

Boeing's 787 Dreamliner in flight. Image source: Boeing.

United Airlines Holdings on Wednesday said it intends to cut domestic and international flights in response to the coronavirus and park some of its larger planes as a result. And Airbus is reportedly considering cutting production of its A330neo wide-body because key customers have decided to postpone deliveries of the plane.

Boeing had already planned to decelerate 787 production heading into 2021, reducing deliveries to 10 per month next year from a current 12 per month. However, the aerospace giant has leaned on Dreamliner delivery revenue to offset the grounding of the 737 MAX and will likely be loathe to cut production earlier unless it is absolutely necessary.

With the airline sector cutting capacity, it could also be harder for Boeing to quickly move the glut of new 737 MAX aircraft that have built up during the grounding. Boeing has recently halted 737 MAX production, it but kept making the jets throughout 2019, causing inventory to build up and forcing the company to use employee parking lots to store jets.

Now what

The unanswerable questions right now are: How long will the coronavirus stunt travel? How will airlines react once it is over?

Travel demand and demand for new airplanes are unlikely to be permanently damaged, but there is a real risk Boeing will struggle later this year to pare down its inventory of 737s. And if airlines are conservative coming out of this slowdown, Boeing might never reach the production levels it had originally envisioned for the 737 MAX.

Boeing's a massive company with an impressive set of assets, but given the uncertainty surrounding key programs, it's understandable that investors are watching from the sidelines.