China Development Bank (CDB) Financial Leasing Co announced on Monday it had agreed with Boeing Co (BA) to cancel the purchase of 29 undelivered 737 MAX jets in the latest blow to the aerospace company.
The move comes after the grounding of 737 MAX aircraft by aviation authorities worldwide and the suspension of 737 MAX aircraft deliveries by Boeing. Following the cancellation CDB Financial Leasing still has a total order of 70 undelivered Boeing 737 MAX jets under various purchase agreements. In addition, the two parties agreed that all Boeing 737 MAX 10 aircraft will be converted to Boeing 737 MAX 8 aircraft and that the delivery of another 20 undelivered jets will be deferred to dates in 2024, 2025 and 2026.
“In light of evolving aviation market dynamics, we’ve been working together with Boeing over many months to re-calibrate our MAX orderbook to be in line with our long-term view of the market and related opportunities,” Xuedong Wang, chairman of CDB Financial unit CDB Aviation, said in a statement.
The cancellation comes after General Electric’s (GE) aircraft leasing company
GE Capital Aviation Services (GECAS) said on Friday it agreed with Boeing to scrap the order of 69 undelivered 737 MAX aircraft from GECAS’ orderbook. Following the agreement, GECAS maintains 29 MAX aircraft in its fleet and 82 on order, making it among Boeing’s largest lessor customers for this family of aircraft.
“[The] agreement will help GECAS better align our available fleet with the needs of our global customer base,” GECAS President and CEO Greg Conlon said in a statement. “We remain fully committed to the 737 MAX program and our valuable, long-term partnership with Boeing.”
Boeing shares advanced 15% on Friday to close at $154 as it said it plans this week to resume production at its Philadelphia plant, as well as, restart manufacturing of its commercial planes in Washington state.
Read more: Boeing Plans to Resume Production Next Week
TipRanks data shows that Wall Street analysts, have a Moderate Buy consensus rating on Boeing’s stock based on 13 Holds and 6 Buys. The $187.11 average price target foresees a 22% upside potential for Boeing shares in the next 12 months. (See Boeing’s stock analysis on TipRanks).
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