CDB Aviation is cancelling 29 of 99 Boeing 737 Max orders while making adjustments to the rest of its orderbook for the type.
It plans to push back the delivery of 20 undelivered aircraft to “various dates in 2024, 2025 and 2026” and, without providing further details, downgauge all remaining Max 10s on order to the smaller Max 8 variant.
The lessor is the world’s 12th largest by virtue of its $7.4 billion portfolio value, according to Cirium’s Portfolio Tracker: Q1 2020. It has now become the third in the Top-20 list to slash its exposure to the troubled narrowbody.
Avolon, fourth-largest lessor in the world with a $19.1 billion portfolio, announced on 3 April, that it cancelled orders for 75 737 Max jets. Following this, GECAS, the second-largest lessor with a $22 billion portfolio, announced on 17 April that it is cancelling 69 Maxes.
Ascend by Cirium’s global head of consultancy, Rob Morris had said earlier this month following the Avolon cancellations that Boeing must be “extremely concerned” that other lessors may follow suit.
Commenting on CDB Aviation’s orderbook update, Patrick Hannigan, chief executive of CDB Aviation, says it is “beneficial to all parties involved”.
In a statement, Boeing says it has held “ongoing discussions” with CDB Aviation about its Max portfolio amid the impacts from the Max grounding and the “current market challenges”.
The airframer says: “After these conversations, we reached an agreement to restructure their Max orderbook. As we have done in the past months, where it has made sense, we have adjusted our orderbook to line up with 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. In light of the Covid-19 pandemic, this adjustment also helps to balance supply and demand with market realities, especially in the leasing channel.”
CDB Aviation says Boeing is offering it “certain economic concessions to mitigate the effect of the amendments” to its purchase agreements, though does not go into detail beyond saying that this refers “in particular” to the deferral of delivery dates.
The lessor tells Cirium it will not be providing further comment on its orderbook update.
Boeing’s 737 Max backlog stood at 4,079 aircraft at the end of March.
Much of Boeing’s commercial operations have been shuttered since 25 March due to the 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.