What happened

Shares of Boeing (NYSE:BA) fell 7.7% on Monday morning and were down more than 2% as of 2 p.m. EDT on some distressing new headlines concerning the COVID-19 pandemic. A second wave could halt a recent recovery by the airlines, and further endanger Boeing's commercial order book.

So what

Boeing shares are down 40% year to date due to the pandemic, but the stock has doubled since mid-March thanks to the company's efforts to boost liquidity and data points indicating that air travel bottomed out early in the crisis and is now slowly recovering.

A 787 Dreamliner takes off.

Image source: Boeing.

But that recovery is tenuous, and investors on Monday were focused on some worrisome signs the pandemic could be nearing a second wave. New cases are surging in key states including California, Texas, and Florida, and China on Monday said it was locking down a section of Beijing after a new cluster of COVID-19 cases was identified.

Even if there is no second wave, airlines are likely to be in no shape to buy new planes anytime soon. United Airlines Holdings on Monday became the latest in the industry to add to its debt load, borrowing $5 billion backed by its loyalty program. U.S. airlines have raised more than $40 billion in private capital so far this year, with much of that total being new debt that will take years to repay.

Now what

Boeing still has a robust order book of more than 4,700 planes, but the total is its lowest since 2013. The 737 Max, which makes up nearly 80% of the total backlog, remains grounded. And even if Boeing succeeds in getting it airborne again in the third quarter, it is going to take awhile to go through the inventory of planes on Boeing lots that have been built but not yet delivered.

Boeing executives have predicted it will take at least a couple of years for airlines globally to normalize. And if anything, that is an optimistic estimate. The stock has rebounded off of its lows and appears stable, but it is hard to imagine Boeing shares continuing their steady climb given the challenges the company faces.

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