Boeing: Airline will not proceed with $6 billion 737 MAX order

A Saudi Arabian airline will not proceed with its $5.9 billion 737 MAX order – instead opting for the competitor.

Reuters reported Sunday that budget airline flyadeal, a Saudi low-cost airline based in Jeddah, will not proceed with its order of 30 Boeing 737 MAX aircraft.

The deal included additional purchasing options for 20 737 MAX jets; however, it has been reported that the airline will instead opt for a fleet of Airbus A320s.

A Boeing spokesperson told Reuters that it was understood flyadeal would not finalise its commitment to the 737 MAX “at this time” due to the airline’s schedule requirements.

The airline has reportedly been considering its options since two fatal crashes involving the jet, which resulted in the combined deaths of 346 people – triggering a global grounding of the jet a huge financial loss on Boeing, reportedly in the billions of dollars.

Flyadeal revealed the allocation of the new aircraft followed from an agreement signed by is parent company, Saudi Arabian Airlines Corporation (SAUDIA), during the Paris Air Show in June this year.

Aircraft deliveries will commence in 2021.

“This order will result in flyadeal operating an all-Airbus A320 fleet in the future,” the airline said in a statement, adding that the agreement was for 100 aircraft.

The announcement that flyadeal will not be proceeding with its 737 MAX comes months after Virgin Australia announced the restructuring of its 737 MAX order to receive aircraft in 2021 instead of 2019.

In separate news, Boeing has announced it will pledge more than a hundred million dollars in support of families and communities affected by both the Lion Air and Ethiopian Airlines 737 MAX crashes.

The manufacturer is currently working with the Federal Aviation Administration (FAA) to return its 737 MAX to service. The FAA recently revealed it was not operating under a strict timeline. Boeing has said that once the aircraft does return to the skies, it will be among the safest aircraft ever to fly.

The Boeing Company chairman, president and CEO Dennis Muilenburg has publicly apologised on behalf of the manufacturer, and has repeatedly stated that it is taking “a comprehensive, disciplined approach” to ensuring that the update to the implicated MCAS is done properly.

Boeing is also facing multiple legal cases, including a class action lawsuit by more than 400 pilots over what they allege is the manufacturer’s “unprecedented cover-up” of known 737 MAX design flaws.

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737 Max a320 airbus boeing Dennis Muilenburg Ethiopian Airlines Lion Air