Malaysia Airlines stated on Wednesday it has halted deliveries of 25 Boeing Co (BA.N) 737 MAX jets, alluding to the delay in plane’s return for servicing since last year it was grounded after two fatal crashes.
Series of blows for Boeing
The decision symbolizes yet another blow for Boeing, which on Tuesday registered its worst net annual orders in many decades; the data also included its lowest figures regarding plane deliveries in 11 years. This setback is due to the grounding of the 737 MAX which resulted in falling far behind its main competitor that is Airbus SE (AIR.PA).
“In view of the production stoppage and the delayed return to service of the 737-MAX, Malaysia Airlines has suspended the delivery of its orders,” the airline stated in an email, without disclosing the resume date of the deliveries.
Malaysia Airlines said, “As there is no clarity yet from various authorities on its return to service, our technical due diligence is still ongoing.”
The carrier was supposed to take delivery of its first 737 MAX in July 2020. However, last year its chief executive stated the introduction to service could drift beyond that.
Malaysia Airlines did not answer quickly to a request for comment on how many among the 25 ordered planes were due for delivery this year. Boeing also did not respond immediately to a request for comment about the decision of Malaysia Airlines.
The Malaysian government has been in search of a buyer for the debt-heavy airline, which is still mending its condition from two tragedies in 2014, when the flight MH370 vanished, which still remains a mystery and flight MH17 was struck down over eastern Ukraine.
According to analysts, carriers that are short of money such as Malaysia Airlines and that place bulk orders of planes could leverage from the 737 MAX grounding. Malaysia Airlines can negotiate with Boeing to reconstruct their orders.
Other cases of Suspension and Cancellation
According to Virgin Australia Holdings Ltd (VAH.AX), it is going to delay taking the first deliveries of 737 MAX jets for about two years to cut capital spending.
Norwegian Air Shuttle ASA (NWC.OL) stated last year that its leasing subsidiary based in Dublin had signed an agreement with Boeing to postpone delivery of 14 737 MAX planes that were ideally due in 2020 and 2021.
On Tuesday, Boeing announced a scorching net negative of 183 orders for the 737 MAX in 2019 which included cancellations, however many of them were linked with the collapse of a major customer, India’s Jet Airways Ltd (JET.NS).
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