Published on April 4th, 2020 | by Mark Dwyer0
Avolon Cancels Orders for 75 B737MAX Aircraft
In its Q1 Business Update, Dublin based aircraft lessor Avolon, announced the cancellation of 75 new Boeing 737 MAX aircraft that were due to be delivered between this year and 2023. These 75 aircraft were unplaced and a further 16 MAXs from the same timeframe were deferred until 2024 or later. The lessor also removed commitments to acquire four Airbus A330neo aircraft due to deliver in 2021 and reprofiled nine A320neo family aircraft from 2020/21 to 2027.
Despite the effects of COVID-19, the lessor reported a successful first quarter with deliveries of 29 new aircraft to nine customers and transitioned two aircraft to follow on leases. There was also a commitment to sell 21 narrowbody and widebody aircraft with an appraised value of $746.8 million. The lessor completed the sale of 16 owned aircraft and two managed aircraft during Q1. Avolon ended Q1 with an owned and managed fleet of 549 aircraft, total orders and commitments for 306 aircraft and 150 airlines customers in 62 countries. Anticipating the impact of COVID-19 on the industry, future aircraft commitments have been reduced in the 2020 to 2023 timeframe by 119 aircraft, from 284 aircraft as at 31st December 2019 to 165 aircraft as at 31st March 2020.
Dómhnal Slattery, Avolon CEO, commented: “We are currently facing the most challenging period in the history of commercial aviation. The global fleet has been effectively grounded as countries work hard to slow the spread of COVID-19. The impact of the virus has been far reaching and the required response, both on an individual and on a community basis, is without parallel. As a leader in our industry, Avolon is working closely with our global customer base to support them during this period. While we have never seen a crisis of this nature, we remain confident that the industry will recover once the impact of COVID-19 recedes.
We are a well-capitalised business and ended the quarter with unrestricted cash and undrawn secured warehouse facilities in excess of US$5 billion. Building on our strong capital base, we have acted swiftly and decisively to address the market outlook and have re-profiled elements of our orderbook to better align with market conditions. While we remain committed to the B737MAX programme, we have cancelled commitments for 75 unplaced B737MAX aircraft. We have also cancelled commitments for 4 A330neo aircraft and deferred delivery dates for an additional 25 narrowbody aircraft to 2024 and beyond.”