Saudi discount airline shifts purchase from 737 MAX as safety woes sting plane maker
By Robert Wall
Boeing Co. Sunday lost a deal for 737 MAX jetliners in one of the first tangible signs the crisis around the plane could shift business to European rival Airbus SE.
Saudi Arabia's flyadeal Sunday said it would buy up to 50 Airbus A320neo planes, the direct rival to Boeing's MAX that has been idled globally in the wake of two crashes within less than five months.
The deal between the discount arm of flag carrier Saudi Arabian Airlines Corp., or Saudia, has a value of more than $5.5 billion, based on Airbus list prices that don't include industry-standard discounts.
The airline, which was launched in September 2017 using Airbus A320 single-aisle planes, last December made a commitment to buy the MAX. The deal came only weeks after a MAX, operated by Indonesian budget airline Lion Air, crashed, killing all 189 aboard. The Saudi commitment for up to 50 MAX jets had a value of $5.9 billion before industry-standard discounts, Boeing said at the time, but it was never formally concluded.
Boeing's MAX deliveries have been frozen since about mid-March following a second crash of one of the jets, in Ethiopia. Similarities between the two MAX crashes sparked global safety concerns. Boeing's plans to fix the plane have encountered delays. Boeing now hopes to submit the fix to regulators in September to get the fleet back into airline service.
Boeing said "our team continues to focus on safely returning the 737 MAX to service and resuming deliveries of MAX airplanes."
Analysts estimate it could take several years to get MAX deliveries back on plan. Hundreds of planes are sitting idle with airlines, more have been built but not yet delivered and Boeing also slowed MAX production in April, effectively delaying future deliveries to some customers.
Flyadeal couldn't be reached for comment about why it abandoned the MAX. The airline said it would receive the first A320neo -- a more fuel efficient model than the Airbus plane it now operates -- in 2021. The jets are part of an order of 100 aircraft Saudia and Airbus announced last month at the Paris Air Show, the aerospace industry's flagship event where big plane deals typically are announced.
Boeing used last month's gathering outside Paris to announce a blockbuster order for 200 MAX planes from British Airways parent International Consolidated Airlines Group SA. It was the first deal for the planes in months and widely regarded as an important vote of confidence in the MAX by a globally recognized carrier.
Airbus officials have played down the idea the Toulouse, France-based plane maker would win business from Boeing's woes. Airbus is mostly sold out of A320neo jets until 2024. But the flyadeal arrangement shows the plane maker can find ways to satisfy nearer-term demand.
Airbus is poised to overtake Boeing this year as the world's largest plane maker after the U.S. aerospace giant cut 737 production rates.
--Andrew Tangel contributed to this article.