GE Capital Aviation Services (Gecas) has canceled orders for 69 Boeing 737 Max jets as part of a “mutually agreed to rebalance” of the lessor’s order book for the troubled narrowbody, the companies confirmed Friday.
The Max program’s order book sustained a severe blow just last month, when Boeing registered cancellations for 150 of the jets, including an order for 75 from Dublin-based leasing firm Avolon. At the time the company said that development would serve to relieve some backlog pressure during the model's grounding.
Boeing, meanwhile, still holds outstanding orders for 82 Max jets from Gecas, which maintains another 29 in its operating fleet.
“We have had ongoing conversations with GECAS regarding their 737 Max portfolio and the impacts from the past year,” said Boeing in a statement. “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. Additionally, since last year, where it has made sense, we have adjusted our production skyline to the fact that we are building fewer Max airplanes than planned. Disciplined adjustments provide us with greater flexibility to manage the 4,000 outstanding 737 orders and protect the value of the Max in the marketplace.”
Boeing expects 737 production workers to resume activities on Monday related to readying the still-grounded Max for eventual re-start of the assembly line in Renton, Washington. All of Boeing’s Puget Sound-area plants ceased major production on March 25 due to Washington state’s emergency declaration related to the Covid-19 virus.
“As we work to return the 737 Max to service, our focus remains on addressing our customers' fleet needs while optimizing the delivery of the more than 4,000 airplanes in our 737 backlog,” Boeing added. “As market conditions normalize, Boeing anticipates that lessors who have restructured or reduced their order books will continue to add Max aircraft to their portfolios through sale-leaseback agreements with airlines. Longer-term we expect these lessors will again place orders for direct Max purchases.”