Aircraft leasing company Avolon has cancelled an order for 75 Boeing 737 MAX, reportedly worth an estimated US $3.8 billion. The cancellation comes as passenger demand is at an unprecedented low given the global crisis surrounding the Coronavirus pandemic.
Before this cancellation, Dublin-based Avolon was the 14th largest customer order for the 737 MAX. The cancelled order, which was placed in November 2017, consisted of 55 MAX 8 and 20 MAX 10 models, with options for 20 more MAX 8. The company has additional orders for the 737 MAX, of which nine have been delivered, leaving 55 aircraft orders for Avolon still outstanding, according to Boeing. Furthermore, 16 of the outstanding deliveries for the years 2020-2023 have been deferred to 2024 and beyond.
The news comes as a further blow to Boeing, since its 737 MAX has been grounded for more than a year in what was the headline dominating crisis of 2019, before Coronavirus took over in January.
With the current global health crisis, at present it is impossible to suggest when Boeing’s top selling aircraft, the very backbone of its commercial offering, will return to service. At present, there are more than 4,300 unfulfilled orders for the 737 MAX, with production and deliveries currently suspended in light of the grounding.
It is expected to take several years for the market to recover in terms of demand, therefore we could see a torrent of other operators and lessors cancelling orders for their new aircraft. It also comes at a time when airlines are accelerating the retirements of their older fleets, in an effort to reduce operating costs at a time where their very survival is at stake amid the ongoing Coronavirus crisis.
Matt is a London-based writer and reporter for International Flight Network who has been involved in aviation from a very young age. He has a particular focus on aircraft safety, accidents and technical details.