Avolon Cancels Order For 75 Boeing 737 Max Jets, 4 Airbus A330neo

Along with 737 Max, Avolon also has canceled four A330neo orders and deferred dellivery of 25 more. 

Avolon Boeing 737 Max
Avolon has canceled orders for 79 aircraft Photo: Avolon

Aircraft leasing company Avolon has announced the cancellation of an order for 75 Boeing 737 Max aircraft. These aircraft were due to be delivered by 2023. 

Altogether, Avolon is canceling orders for 79 aircraft and delaying delivery of another 25 aircraft. Along with this, the lessor has also cancelled order for four A330neo aircraft and also deferred delivery dates for other 25 narrowbody aircraft including some Max aircraft to 2024 and beyond.

Avolon said that this action was to adjust its order book in response to the current disruptions caused by the wide-spread coronavirus pandemic.

Avolon said that more than 80% of its customers have asked for relief, including deferrals of aircraft rent payments, with average lease payments being deferred for couple of months, in a statement.

Avolon Boeing 737 Max
Majority of the orders were for Max 8s Photo: Avolon

Out of 75 Boeing 737 Max ordered back in 2017, 55 were Max 8s and 20 were Max 10s, with options for 20 more Max 8s. The deal was worth nearly $11 billion at list price.

However, Avolon said that it will remain committed to the Max aircraft, which has been grounded for a year now.

The lessor has also rescheduled an order for 16 Max aircraft to 2024 and beyond. Boeing said that Avolon now has orders for 55 Max aircraft.

Avolon said in an statement:

"The net impact of our actions in the first quarter is to reduce our aircraft commitments in the 2020 to 2023 timeframe from 284 aircraft, as at year end, to 165 aircraft today and thereby significantly reducing our near-term capital commitments."

Avolon A330
Avolon has also cancelled order for four A330neos Photo: Avolon

Avolon also said that it had not signed agreements with airlines to lease the 75 Max aircraft.

Due to ongoing travel restrictions and decrease in demand for air travel, Airbus and Boeing will be forced to cut production by around 40% through 2021, citing airlines current condition.

Airbus is planning to cut the production of its popular A320 series by half for at least two quarter this year and will not return to its previous production rate until next year.

Airbus To Cut Production Rate Of A320 Narrow-body Aircraft To Just 36 Aircraft Per Month.

Avolon A320
Avolon has hundreds of order of A320 family Photo: Avolon

The leasing company still has more than 190 A320 family aircraft on order, according to Airbus data.

Avolon Chief Executive Officer, Domhnal Slattery said this period as "the most challenging period in the history of commercial aviation."

"As we have produced fewer Max airplane than planned, we have implemented these adjustments to regain flexibility in managing the more than 4,300 unfilled 737 Max orders," Boeing said in a statement.

Boeing called this agreement as "the right step to align to the realities of the marketplace as we balance supply and demand and protect the 737 Max's underlying value, especially in the leasing sector."

Avolon A330
Among others Avolon leases A330neos to many airlines Photo: Avolon

Avolon ended the first quarter of 2020 with an owned and managed fleet of 549 aircraft, along with orders and commitments for 306 aircraft.