Plus   Neg

Boeing Loses Saudi Airline's 737 Max Contract To Airbus


Low-cost airline flyadeal, a subsidiary of Saudi Arabian Airlines, cancelled an order for 30 Boeing 737 Max aircraft after two fatal crashes involving the jets in Ethiopia and Indonesia as well as other safety risks identified recently.

The provisional order for the narrow-body aircraft was announced by Boeing in December last year. The deal, valued at up to $5.9 billion at list price, also included an additional option to purchase 20 more 737 Max aircraft.

flyadeal selected the 737 MAX 8 as it has capacity for 189 passengers in a one-class configuration. Compared to flyadeal's current fleet of A320s, the MAX 8 carries 12 more passengers and provides 8 percent lower operating costs per seat.

Boeing has been reeling under the impact of two deadly crashes of its 737 Max aircraft within a short span of five months that killed a total of 346 people. The 737 MAX 8 is Boeing's best-selling aircraft.

Boeing 737 MAX jets have been grounded globally on safety concerns following the Ethiopian Airlines crash in the outskirts of Ethiopia's capital city Addis Ababa in March that killed all 157 people on board. It was the 737 Max's second disaster, after 189 people were killed on a Lion Air flight in Indonesia in October last year.

While Boeing is working hard with regulators to get the 737 MAXs back in the air, flyadeal has switched sides to its competitor Airbus to announce a similar deal for 30 A320 NEO aircraft and options for a further 20 A320 NEO family aircraft. Deliveries of the flyadeal aircraft will commence in 2021.

flyadeal said the order is in response to continuing growth in passenger demand across domestic, regional and international routes. This order will result in flyadeal operating an all- Airbus A320 fleet in the future.

The Airbus order is also part of an agreement signed with Saudi Arabian Airlines Corp. (SAUDIA) during the Paris Air Show in June this year for a total of 100 aircraft.

The additional aircraft are part of the dual brand strategy of the Saudi Arabian Airlines where flyadeal serves the price conscious customer that is seeking Everyday Low Fares.

flyadeal, which began operation in September 2017 to serve domestic destinations, currently operates a fleet of 11 Airbus A320-200 aircraft.

For comments and feedback contact: editorial@rttnews.com

Business News

Follow RTT