Malaysia Airways suspends Boeing 737 MAX deliveries resulting from jet’s grounding

KUALA LUMPUR/SYDNEY (Reuters) – Malaysia Airways stated on Wednesday it had suspended deliveries of 25 Boeing Co (BA.N) 737 MAX jets, citing the airplane’s delayed return to service because it was grounded final yr following two deadly crashes.

FILE PHOTO: A Boeing 737 Max plane sits on the tarmac at Boeing’s 737 Max manufacturing facility in Renton, Washington, U.S. December 16, 2019. REUTERS/Lindsey Wasson

The choice represents one other setback for Boeing, which on Tuesday reported its worst annual internet orders in a long time, together with its lowest variety of airplane deliveries in 11 years, because the grounding of the 737 MAX noticed it fall far behind foremost competitor Airbus SE (AIR.PA).

“In view of the production stoppage and the delayed return to service of the 737-MAX, Malaysia Airlines has suspended the delivery of its orders,” the airline stated in an electronic mail, with out saying when it wished the deliveries to renew.

“As there is no clarity yet from various authorities on its return to service, our technical due diligence is still ongoing,” Malaysia Airways stated.

The airline stated it had beforehand deliberate to have 5 737 MAX jets delivered this yr, the primary in July. Final yr, its chief government had stated it was potential the craft’s introduction to service might slide past July.

Boeing stated it was sorry for the disruption the 737 MAX scenario had prompted Malaysia Airways.

“We are working to support them and all of our customers in every way possible to ensure complete confidence in the 737 MAX and a safe return to commercial flight,” Boeing stated in an announcement.

The Malaysian authorities has been looking for a purchaser for the debt-heavy airline, which remains to be recovering from two tragedies in 2014, when flight MH370 disappeared in what stays a thriller and flight MH17 was shot down over japanese Ukraine.

Analysts stated cash-strapped carriers like Malaysia Airways that over-ordered planes might reap the benefits of the 737 MAX grounding to barter with Boeing to restructure their orders.

Virgin Australia Holdings Ltd (VAH.AX) stated final yr it could delay taking the primary deliveries of 737 MAX jets for almost two years to cut back capital spending.

Norwegian Air Shuttle ASA (NWC.OL) stated final yr its Dublin-based leasing subsidiary had reached an settlement with Boeing to postpone supply of 14 737 MAX planes that have been initially due in 2020 and 2021.

Boeing on Tuesday reported a internet adverse of 183 orders for the 737 MAX in 2019 together with cancellations, however many have been related to the collapse of a serious buyer, India’s Jet Airways Ltd (JET.NS).

Reporting by Liz Lee and Jamie Freed; Enhancing by Edwina Gibbs and Christopher Cushing

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