Saudi Airline Drops Boeing's 737 Max for a Rival Airplane

Saul Bowman
July 9, 2019

Saudi Arabian budget airline flyadeal won't proceed with a provisional $5.9 billion order for Boeing 737 MAX aircraft, as an alternative choosing a fleet of Airbus A320 jets.

"We understand that Flyadeal will not finalize its commitment to the 737 MAX at this time given the airline's schedule requirements", a Boeing spokesperson said, according to Reuters. The latest declaration replaces Flyadeal's $5.9 billion-agreement with Boeing for 50 737 Max 8 jets last December. "Flyadeal" and Boeing did not immediately respond to emailed requests for comment. Indonesian airline Garuda has also canceled an order for billions worth of Max planes, saying that its customers have "lost confidence to fly" in the plane. Boeing still lists the airline's 187 unfilled orders as active.

While not a firm order, it was seen as a boost for Boeing.

Some American airlines said that they will allow passengers to re-book flights scheduled to be on 737 Max planes free of charge when the plane returns after it is recertified by the FAA and other global regulators. The decision marks a commercial setback for Boeing.


Meanwhile, Boeing and Embraer ERJ entered into a joint venture (JV) worth $3.8 billion a year ago. Now, Boeing is facing cancellation of a lucrative contract to sell 20 Max 737s to a Saudi Arabian airline, signaling that the company's troubles are far from over.

Deliveries of the flyadeal aircraft are scheduled to begin in 2021, which will make the LCC an all-A320 operator. Preliminary investigations point to the role played by new software that pushed the planes' noses down.

Boeing CEO Dennis Muilenburg has apologized for the loss of lives and vowed to make the plane safer.

Boeing's shares traded down about 1.3% at $351.10 in Monday's premarket. Last week, the company announced that it would pay out $100 million to a fund for families of victims of the crashes, separate from any lawsuits over the matter.

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