One of Boeing's Biggest Customers Just Dealt a Blow to the 737 MAX
Airplane leasing giant Avolon said Friday it was cancelling orders for 75 Boeing (NYSE: BA) 737 MAX planes scheduled to be delivered by 2023, part of a broader adjustment of its order book due to disruptions caused by the COVID-19 pandemic.
The move, though not entirely unexpected, is a setback for Boeing in its effort to get the once-promising 737 MAX program airborne. And it could be a sign of things to come for Boeing and archrival Airbus (OTC: EADSY) as airlines and leasing companies reassess their need for new planes following an unprecedented global slump in travel.
The 737 MAX has been grounded for more than a year following a pair of fatal accidents, but the company is optimistic it will be cleared to return to the skies by mid-year. The bull case for Boeing is tied to the plane's more than 4,000-unit-strong order book, but as Avolon suggests, that order book is likely to come under pressure in the months to come.
Source Fool.com
