An order for Boeing’s 737 Max aircraft was recently cancelled by the low-cost Saudi Arabian airline Flyadeal.
This decision by the airline compounds the problems for Boeing which is already reeling under the pressure of all of its 737 Max planes being grounded across the world following two consecutive deadly crashes involving the aircrafts. The first one took place in October of 2018 in which 189 people on board a flight of Lion Air died after the 737 Max craft crashed near Jakarta in Indonesia. The second accident happened in March of 2019 in which all 157 people on board an Ethiopian Airline flight were killed soon after takeoff just outside Addis Ababa. All airlines and most of the airline regulators ordered grounding of 737 Max planes which was followed by Boeing itself deciding to ground all of the models all across the world.
The probable cause of both the fatal crashes was attributed to a software flaw in the planes that forced the nose of the plane to dive down with the pilots unable to gain control over the plane. Boeing is currently under severe pressure to work out a workable fix that will satisfy regulators and enable 737 Max planes to go fly again. However still now, there has been no indication of a final date when that could happen.
Flyadeal had decided not to go ahead with the provisional order because of “schedule requirements”, Boeing said.
The deal was worth $5.9bn at list prices and included an additional option to purchase 20 more 737 Max aircraft. Boeing however has said hat it would not have offered a discount on that price tag to the airline.
Following its decision of cancelling orders for the 737 Max crafts of Boeing, flyadeal has instead chosen to go for a fleet of Airbus A320 planes. The airline is controlled by state-owned Saudi Arabian Airlines.
The two crashes and the ensuing grounding of the 737 Max aircrafts has also resulted in a slew of court cases being filed against Boeing by people close to the deceased in the two crashes. It has also tarnished the image of the company and caused a fall in its shares. The company announced last week that it apportioned $100 million for providing financial help to the families of those who had been affected by the two crashes. Boeing has said that the money would not be related to the law suits filed in the wake of the crashes and would be made over a period several years. A total of 346 people were killed in the two crashes.
The move by Boeing of making the payment was however dismissed by the lawyers iof the victims’ families.
An offer of buying out 200 Boeing 737 Max aircraft was last month made by British Airlines owner IAG. That was a boost for Boeing even though the intent was not a firm order. The planes would be used by IAG’s airlines including British Airways, Vueling and Level. The two parties had signed a letter of intent at the Paris Air Show.
“We have every confidence in Boeing and expect that the aircraft will make a successful return to service in the coming months having received approval from the regulators,” IAG chief executive Willie Walsh had said at the time.
(Adapted from BBC.com)