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Saudi carrier cancels troubled Boeing 737 order for Airbus

July 10, 2019

 

 

 Boeing’s campaign to restore the reputation of its best-selling plane after two deadly crashes suffered a blow with a Saudi airline canceling an order worth up to $5.9 billion in favor of a European rival of the U.S. manufacturer.

 

Flyadeal, the budget airline arm of Saudi Arabian Airlines Corp., ordered 30 A320neo jets from Airbus and took options on 20 more, meaning that its entire fleet will consist of planes from that company.

 

It’s a potentially troubling sign for Boeing, which has not seen customers divert orders to Airbus en masse.


A small number of airlines have threatened to cancel 737 Max orders since crashes off the coast of Indonesia and in Ethiopia killed 346 people. The Max has been grounded since March.

 

Officials with Indonesia’s Garuda said in March that they were canceling the remaining 49 of a 50-jet Max order. Published reports suggest the airline and Boeing are in talks, however, and Boeing still lists the last 49 Garuda orders on its website.

 

Similarly, the owner of Lion Air — the Indonesia airline whose Max jet was involved in the first fatal crash in October — vowed to cancel. Boeing still lists the airline’s 187 unfilled orders as active.

 

Middle Eastern carriers Flydubai and Oman Air have threatened to switch to Airbus.

 

Flyadeal did not mention Boeing in its weekend announcement and did not disclose financial terms of the Airbus order, although the list price of the planes is about $5.5 billion. Carriers rarely pay list prices.

 

Flyadeal said the Airbus agreement emerged from last month’s Paris Air Show.


A Boeing spokesman said Monday that the company does not discuss customer decisions.

 

Boeing got a boost at the Paris Air Show when the parent company of British Airways and Spain’s Iberia said it intends to buy another 200 Max planes. The CEO of International Airlines Group, Willie Walsh, said he was confident the plane would make a successful return.

Boeing disclosed in April that it has booked about $1 billion in charges related to fixing the plane. Analysts expect that to rise sharply.

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