Irish aircraft lessor, Avolon, has cancelled an order for 75 Boeing 737 Max planes and commitments for four Airbus A330neos due to the COVID-19 crisis.
The Dublin-based aircraft leasing firm announced the move on Friday 3rd April, cancelling an order for 75 Boeing 737 Max aircraft which were due for delivery in 2023. The third biggest commercial jet lessor in the world said it was adjusting its order book due to the disruption caused by the COVID-19 pandemic.
Avolon, which buys aircraft from manufacturers and leases them to airlines around the world, signed the deal for 55 Max 8s and 20 Max 10 planes in 2017, in a deal that was estimated to stand at nearly US$11 billion at list prices.
Boeing acknowledged Avolon’s decision to cancel the order, and came to a mutual agreement, following discussions about the impact of the 737 Max grounding over the past year and their aircraft portfolio. The aircraft manufacture acknowledged that the decision by Avolon was the "right step" and reflected the "realities of the marketplace". Avolon said it would “remain committed to the Boeing 737 Max programme,” with Boeing confirming that the lessor still has orders for 55 737 Max aircraft.
The aviation leasing firm has also rescheduled deliveries of other aircraft until 2024 and beyond. These include sixteen 737 Max planes, which were due to enter service over the period 2020 to 2023.
In addition to rescheduling deliveries, Avolon also announced that it was cancelling commitments for four wide-body Airbus A330neo aircraft and deferred delivery dates for an additional 25 narrowbody aircraft till after 2024, which includes the sixteen Max jets.
According to Avolon CEO Dómhnal Slattery, “Avolon has always maintained a flexible approach to ensure we can adapt to rapidly changing market conditions and align our business with the needs of our customers. While it remains difficult to determine the length or depth of this crisis, we remain confident in our prospects and in the ability of the industry to recover in the aftermath of COVID-19.”
He also added that the COVID-19 pandemic was “the most challenging period in the history of commercial aviation.” He noted that the lessor had total liquidity in excess of $5 billion and that Avolon would remain flexible to allow the business to meet its airline customers’ needs.