General Electric Capital’s aircraft leasing subsidiary, GECAS has cancelled an order for 69 Boeing 737 MAX aircraft.
The Irish-American based aircraft leasing firm announced the news on Friday the 17th of April. The aircraft lessor said in a statement they had reached a mutual agreement with Boeing “to rebalance the lessor’s skyline orderbook for 737 MAX aircraft”. The news comes as Avalon, the third biggest lessor also cancelled an order for 75 MAX aircraft earlier in April.
GECAS President and CEO, Greg Conlon said that this agreement “will help GECAS better align our available fleet with the needs of our global customer base.” He added that the company remains “fully committed to the 737 MAX program” noting the valuable, long-term partnership they had with Boeing. The agreement was made as a result of ongoing negotiations with Boeing and is unrelated to the current COVID-19 pandemic. The world's largest aircraft lessor by aircraft numbers added that this rebalancing of its order book portfolio has been done in order to meet the needs of their customer base. GECAS, who have offices in Shannon, Ireland, originally signed a deal for 75 Boeing 737 MAX 8 aircraft back in 2017, which was estimated to be worth $8.25 billion at list prices.
Details as to whether the lessor will receive any refunds for pre-delivery payments remain strictly confidential. Despite this cancellation, GECAS still has a fleet of 29 737 MAX planes and a further 82 on order, making them Boeing’s largest lessor customer for this type of aircraft.
In a statement, Boeing confirmed the cancellation came as a result of “ongoing conversations with GECAS regarding their 737 MAX portfolio and the impacts from the past year. We have come to an agreement with GECAS to restructure their MAX order book. In light of the COVID-19 pandemic, this adjustment helps to balance supply and demand with market realities, especially in the leasing channel. We appreciate GECAS’ ongoing commitment to the 737 MAX program with more than 100 MAXs in their portfolio, including 82 unfilled orders. We look forward to delivering more MAX jets and helping them with their future fleet needs.”
This news comes just days after Boeing announced that it had received a total of 150 Boeing 737 MAX cancellations. However, the aircraft manufacturer still has over 4000 outstanding orders for the 737 MAX aircraft. Boeing is also planning to restart production as early as next week, with the expectation that most employees will be back to work by April 24th.