A low-cost Saudi carrier is among the first Boeing customers to cancel a future order for 737 Max aircraft – the model that was involved in two fatal crashes over the last few months.
Flyadeal, the low-cost arm of state-owned Saudi Arabian airline, cancelled an order of 30 Boeing 737 Max aircraft. The deal, which had the provision of ordering 20 more jets, was worth $5.9 billion at list prices, Boeing had said previously.
Instead, Flyadeal will be operating an all Airbus fleet with 50 A320neo aircraft, which it will take the first delivery by 2021.
The deal marks the first major loss for Boeing, which grounded its previously popular 737 Max model after it was involved in an Ethiopian Airline crash this year and a Lion Air crash in 2018 that killed a total of 346 people.
The incidents have caused much monetary damage to Boeing, which has seen its shares dip in the immediate aftermath of the crashes due to the backlash. Although the 737 Max has been pulled from commercial operations, its return to the skies has been delayed since it has not cleared the regulatory approvals deeming it safe.
Last month, Boeing said that it is working on an additional requirement suggested by the US aviation regulator Federal Aviation Administration (FAA) to its software upgrade. But the delays could have likely cost Boeing its first deal.
The cancellation of the deal comes after Flyadeal’s CEO Con Korfiatis told media that the airline might explore other options if the process of deeming the 737 Max safe took too long.