China Development Bank Financial Leasing canceled an order for 29 Boeing 737 Max planes, worth at least $2.9 billion based on list prices, joining a growing list of customers scaling back plans for buying the grounded jet.
The move cuts the company’s outstanding Max order to 70, it said in a statement to the Hong Kong stock exchange Monday. The 737 Max 10s still on order will be converted to smaller Max 8 aircraft, while the delivery of 20 jets will be deferred to between 2024 and 2026, the company said.
Boeing is working with regulators to clear a flying ban on the Max, which has been grounded worldwide since March 2019 following two fatal crashes. Earlier this month, leasing firm Avolon Holdings Ltd. canceled an $8 billion deal for 75 jets, and General Electric’s aircraft-leasing division followed that last week when it canceled an order worth at least $6.9 billion for 69 undelivered jets.
The coronavirus pandemic is adding to Boeing’s woes as it crushes travel and demand for planes. Chief Executive Officer Dave Calhoun has said the company will face a “new reality” in a market that could take years to recover.
“Boeing will offer certain economic concessions that are intended to mitigate the effect of the amendments to the purchase agreements, in particular, the deferral of delivery dates,” the Chinese company said in its statement Monday.
In a separate development, BOC Aviation said Sunday it purchased six 787-9 and 16 Max 9 aircraft in a sale and leaseback agreement with United Airlines Holdings Inc. It didn’t disclose the value of the deal.
After suspending Max output in January, Boeing plans to slowly restart production of the narrow-body model soon to stress-test its supply chain and avoid flooding the market with unneeded planes.
The company is also facing plunging demand for its wide-body aircraft, and at least $19 billion in costs from the fallout of the Max accidents. Last month, Boeing drew down a $13.8 billion loan to bolster reserves.