LONDON — Singapore-based BOC Aviation said today it had canceled orders for 30 Boeing 737 MAX, also deferring the delivery of an undisclosed number of the type.
BOC Aviation is the latest lessor to cancel its Boeing 737 MAX orders as the jet remains grounded pending regulatory approval following two fatal crashes, which killed 346 passengers and Crew.
Back in August 2014, BOC Aviation signed its first order for 50 Boeing 737 MAX 8, followed by an additional 22 in November of that year and 13 in March 2017. BOC is also one of the launch customers of the Boeing 737 MAX 10, with an order for 10 of the type placed in August 2017.
The most recent aircraft registry from the company shows 93 737 MAX on order with six deliveries to Corendon Airlines (XC), Travel Service (QS), SpiceJet (SG), Icelandair (FI). The registry does not reflect a purchase and leaseback deal signed with Southwest Airlines (WN) for 10 737 MAX 8s last May.
Boeing Woes Amount
The BOC Aviation cancelation comes less than 24 hours after Norwegian Air (DY) canceled 92 737 MAX and five 787 Dreamliners. Earlier this month, Qatar Airways (QR) also put to an end its order for 30 Boeing 737 MAX 8s, intended for the now-defunct Air Italy (IG).
Earlier in March, Kuwait-based leasing aviation firm ALAFCO filed a USD$336m lawsuit against Boeing. ALAFCO stated that Boeing failed to deliver nine 737 MAX on time and that the airframer was breaching the terms and conditions of the contract for not returning the advance payments for orders for 40 aircraft, all of them previously canceled.
Despite the grim scenario for the troubled airliner, grounded since March 2019, Robert James Martin, BOC Aviation Chief Executive Officer, remains confident in the jet. “We discussed with Boeing what is the best way to deploy our capital in a time like this because everyone realizes this is not a short-term downturn, it is a long one.”
“This is not in any way loss of confidence in the MAX. We are absolutely confident.” Martin said.
A smaller market for the MAX
With the COVID-19 pandemic wreaking havoc on the air travel industry, the cancelations of orders for new aircraft are hardly surprising.
According to the most recent financial information from the International Air Transport Association (IATA), airlines will lose more money than ever before because of border closures and a near-total shutdown of international flights caused by the pandemic.
Once recertified, the Boeing 737 MAX will find itself in a different scenario. The challenge for the program will not only be to regain the confidence of regulators, operators, and passengers, but also to find a market niche that now and in the foreseeable future seems to be smaller.