Boeing Sunday officially misplaced its first order to European rival Airbus within the aftermath of two deadly 737 Max crashes and the following grounding of the plane by global regulators. Some analysts assume this cancellation will not be the last.
Flyadeal, the budget airline run by Saudi Arabian Airlines, declared on Sunday that it’d purchase as much as 50 Airbus A320neo planes, the competing narrowbody model to Boeing’s 737 Max, and function an all-Airbus fleet. The move reverses a December plan to buy as much as 50 737 Max planes valued at $5.9 billion, based mostly on record prices.
Whereas it is the first official swap because the 737 Max was grounded, Indonesian carrier Garuda stated earlier this year it was speaking to Boeing about canceling its order after Boeing delivered simply one of the 50 737 Max jets. Together, the two orders are valued at roughly $10 billion, at record prices, although carriers are sometimes provided substantial reductions.
“I do not assume we have seen the ends of those bulletins,” business analyst Henry Harteveldt of Atmosphere Research Group informed CBS News’ Kris Van Cleave. “The massive problem is Airbus’ production capability. Airbus wants to seek out methods to extend its manufacturing capability for its A320 line of aircraft, which is not simple to do.”
Other carriers are also weighing options. Oman Air started in June it might begin talks with Airbus if Boeing did not present “support and recovery” for the 737 Max. In April, Flydubai stated it might contemplate an Airbus order to exchange its Max order.