Boeing loses Max customer as Saudi Arabia's Flyadeal cancels order

Posted July 09, 2019

Flyadeal, the budget airline run by Saudi Arabian Airlines, announced Sunday it will buy up to 50 Airbus A320neo planes, the competing narrowbody model to Boeing's 737 Max, and operate an all-Airbus fleet. The list price for the 20 Max 737s, each of which costs about $117 million, would normally run $5.9 billion, though Flyadeal would have gotten an undisclosed discount.

Boeing's campaign to restore the reputation of its best-selling plane after two deadly crashes suffered a blow with a Saudi airline canceling an order worth up to $5.9 billion in favor of a European rival of the US manufacturer.

The move was in response to continuing growth in passenger demand across domestic, regional and worldwide routes, the airline said.

"We understand that Flyadeal will not finalize its commitment to the 737 MAX at this time given the airline's schedule requirements", a Boeing spokesman was quoted by the AFP as saying.

Notably, the Saudi carrier has exclusively been an A320 operator.

Flyadeal, part of Saudia Group, had been considering both the A320neo and MAX.

The Boeing 737 Max hasn't been taking off, either literally nor figuratively.

Similarly, the owner of Lion Air - the Indonesia airline whose Max jet was involved in the first fatal crash in October - vowed to cancel. But that was before the technical faults were detected.

Crash investigators have concentrated their efforts on the aircraft's control system and Boeing has been working with regulators to roll out a software upgrade.

We believe this has been the final nail in the coffin, compelling Flyadeal to cancel Boeing's 737 Max order and replace it with A320 Neo. After all, 737 MAX has been the fastest-selling airplane in Boeing history.

The aircraft has been grounded since March and it is still uncertain when it will return to the skies. In April, Virgin Australia pushed back delivery of its first 737 Max jets by nearly two years.

Before the 737 Max crashes, the world's two biggest plane makers were already dealing with huge backlogs and had been increasing production to meet rising global demand.

Meanwhile, Boeing is trying to pick up the pieces after a disastrous year.