MIAMI – In recent days TUI Group and Boeing have agreed on a comprehensive package of measures to offset the consequences of the grounding of the Boeing 737 MAX.
While the details of the agreement are confidential, it provides compensation which covers a significant portion of the loss due to the financial impact of the pandemic, as well as credits for future aircraft orders.
The compensation will be realized over the next two years.
New agreement on the delivery schedule
In addition, both parties have agreed to a revised delivery schedule for the 61 Boeing 737 MAX aircraft on order, meaning that TUI will get fewer 737 MAX deliveries from Boeing than previously planned in the next several years.
New deliveries are postponed by an average of two years
The associated payment schedules have been adapted accordingly. As a result, less than half of the originally planned Boeing 737 MAX aircraft will be delivered to the Group in the next two years.
On average, compared with the original scheduling, the Boeing 737 MAX deliveries will be delayed by approximately two years.
This will significantly reduce TUI’s capital and financing requirements for aircraft in the coming years, and supports TUI’s plan to reduce the size of the fleets of its five European airlines in the wake of the Corona crisis.
It was agreed not to disclose the financial details of the agreement.
Statement from TUI Group CEO
TUI Group CEO Fritz Joussen (57) commented on the agreement with Boeing:
“We have reached a fair agreement that strengthens our long-standing relationship with Boeing. The agreement provides TUI Group with compensation for a large part of costs that were incurred due to the grounding of the Boeing B737 MAX.”
The CEO said that the new delivery schedule gave the Group considerable flexibility because it would have fewer new aircraft delivered in the next years.
Joussen concluded, “This enables TUI to rapidly adapt its fleet growth to the currently challenging market environment. And it supports our plan to downsize the aircraft fleet and reduce the capital requirements for aircraft investments in the Group.”
In March 2019, a worldwide flight ban was imposed on the Boeing 737 MAX, which also had an impact on the operations and fleet renewal plans of TUI.
At the time of decommissioning, the TUI Group had 15 Boeing 737 MAX aircraft in their fleets, with eight more scheduled for delivery in 2019.
With its five airlines in Germany, the UK, Belgium, the Netherlands, and Sweden, the TUI Group is one of Boeing’s largest European customers for the Boeing 737 family.
The Group currently has a fleet of 144 aircraft, with an average age of 10 years. This includes 100 B737-700/800/MAX8, three B747-400, seven B757-200, six B767-300, 19 B787-8/9 Dreamliner, one A319-100, four A330-200/300, and four ERJ-190.