Irish-based aircraft lessor Avolon cancels 27 Boeing 737 Max jets

Aircraft lessor Avolon said it cancelled an additional 27 Boeing 737 Max planes after cancelling 75 of the jets in April.
Irish-based aircraft lessor Avolon cancels 27 Boeing 737 Max jets
Pictured at the Farnborough Air Show, from left to right, Patrick Shanahan, Vice President and General Manager of Airplane Programs for Boeing Commercial Airplanes Ray Conner, President and Chief Executive Officer of Boeing Commercial Airplanes Domhnal Slattery, Avolon Chief Executive Officer and John Higgins, Avolon Vice President and Chief Commercial Officer.
Pictured at the Farnborough Air Show, from left to right, Patrick Shanahan, Vice President and General Manager of Airplane Programs for Boeing Commercial Airplanes Ray Conner, President and Chief Executive Officer of Boeing Commercial Airplanes Domhnal Slattery, Avolon Chief Executive Officer and John Higgins, Avolon Vice President and Chief Commercial Officer.

Aircraft lessor Avolon said it cancelled an additional 27 Boeing 737 Max planes after cancelling 75 of the jets in April.

It also cancelled one Airbus A330neo widebody jet, the fifth it has cancelled since the start of the Covid-19 crisis, and deferred the delivery of three A320neo aircraft until 2022.

The Dublin-based lessor, which is owned by China's Bohai Capital, said it has reduced it near-term commitments by over 140 aircraft since the start of the year as it grapples with the fall-out of the Covid-19 pandemic.

The now grounded Boeing 737 Max gives a display during the opening day of the Farnborough International Airshow in Hampshire in 2018.
The now grounded Boeing 737 Max gives a display during the opening day of the Farnborough International Airshow in Hampshire in 2018.

However, Boeing and the US.Federal Aviation Administration last week completed certification test flights, a key milestone toward the plane’s return to service.

Rival lessor BOC Aviation last week said it had canceled an order for 30 Max jets while Norwegian Air canceled orders for 92.

On the one hand, such cancellations can help clear production slots to deal with a large backlog of Max deliveries, but they also underscore uncertainty over underlying demand for the Max, analysts have said.

The cancellation of five A330neo from one of plane’s launch customers is also embarrassing for Airbus.

Avolon, in a financial update at the end of the second quarter, said it still has in excess of $5bn (€4.4bn) in liquidity. It said it had reduced by one-third its capital commitments to the end of 2021 and since the start of the year had cut by more than half its 2020-23 capital commitments.

“These actions provide us with the capital strength to manage through this market backdrop and to support our customers through the recovery,” chief executive Dómhnal Slattery said in a statement.

“The months ahead will be difficult, but we have the experience and balance sheet to manage through these headwinds,” he added. Reuters

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