Aircraft lessor GE Capital Aviation Services (GECAS) has terminated orders for 69 Boeing 737 Max, further reducing Boeing’s Max backlog amid a downturn that has hammered airlines and the global aerospace industry.
“GE Capital Aviation Services and the Boeing Company have mutually agreed to rebalance the lessor’s skyline order book for 737 Max,” says a 17 April GECAS media release announcing the order terminations.
“Today’s agreement will help GECAS better align our available fleet with the needs of our global customer base. We remain fully committed to the 737 Max programme and our valuable, long-term partnership with Boeing,” the release adds.
After the terminations, GECAS holds remaining firm orders for 82 737 Max. It also has 29 Max in its fleet currently.
GECAS’s release provides few other details, saying its agreements are confidential. Reached by FlightGlobal, GECAS declines to say which airlines the aircraft were earmarked for but stresses its commitment to the Max.
GECAS adds that not all aircraft in its order book are allocated and says it still holds purchase-and-leaseback agreements covering 15 737 Max. Under those deals lessors buy aircraft and immediately lease them to airlines.
In a statement, Boeing says it reached agreement with GECAS following conversations related to “impacts from the last year”.
“In light of the COVID-19 pandemic, this adjustment helps to balance supply and demand with market realities, especially in the leasing channel,” Boeing adds. “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.”
Such “adjustments” give Boeing greater flexibility to manage deliveries of its remaining 4,000 737 Max orders, it adds.
News of GECAS’ Max terminations comes several days after Boeing disclosed that airlines nixed orders for 150 737 Max in March. Those aircraft had been ordered by lessor Avolon, airlines GOL and Smartwings, and undisclosed customers, Boeing said.
Boeing’s 737 Max backlog at the end of March stood at 4,079 aircraft.
Much of Boeing’s commercial operations have been shuttered since 25 March due to coronavirus, but Boeing intends to reopen Seattle-area commercial production sites starting 20 April. With the reopening, Boeing will resume production of all commercial aircraft types and bring 27,000 staffers back to work.