Tue | Dec 10, 2019

Grounded Boeing 737 Max scores buyers at Dubai Airshow

Published:Wednesday | November 20, 2019 | 12:27 AM
Boeing Commercial Airplanes president and CEO Stanley A. Deal, left, and Air Astana chief planning officer Alma Aliguzhinova pose at a news conference at the Dubai Airshow in Dubai, United Arab Emirates, Tuesday, Nov. 19, 2019. Kazakhstan's national carrier Air Astana announced Tuesday a letter of intent to purchase 30 of Boeing's 737-8 Max jets for its new budget airliner FlyArystan.

Boeing’s 737 Max jet got another boost at the Dubai Airshow on Tuesday, this time with an order from Kazakhstan’s newly launched budget carrier as the Chicago-based company works to try and win United States regulatory approval to get the airplane back in the sky by early next year.

The plane has been grounded around the world after two crashes that killed 346 people. The jet’s automated flight control system has been blamed in part in the crashes that occurred after take-off from Indonesia in October of last year and from Ethiopia in March.

Still, the single-aisle jet managed to secure some deals at the air show.

Kazakhstan’s national carrier Air Astana announced a letter of intent to purchase 30 of the 737-8 Max jets with a list price value of US$3.6 billion for its new budget airliner FlyArystan. A day earlier at the air show, Turkey’s SunExpress announced a purchase of 10 additional 737-8 Max jets for its fleet.

Airlines are likely negotiating competitive prices for the aircraft as Boeing talks to its already existing customer base about possible compensations related to the grounding of the jets and reaches settlements with relatives of victims who perished.

Air Astana executives said details of the deal, including the final price, will be finalised in the coming months as the newly launched low-cost carrier scales its services from its current fleet of two A320 aircraft. FlyArystan began operations in May.

Air Astana’s Chief Planning Officer Alma Aliguzhinova said FlyArystan expects to start operations of the first 737 Max in late 2021, giving the company 18 months to observe its operations from when Boeing hopes to have the jet back in service globally.

“What we see is that, as I said, we have time before we start operations,” she said. “So we are confident that this will be addressed by that time … . We are confident in Boeing.”

In a major coup for Boeing not long after the second crash, one of the world’s largest airline groups, IAG, announced in June its intention to purchase 200 of the 737 Max jets.

Boeing competitor, Airbus, meanwhile, also moved ahead with some deals on Tuesday after securing US$30 billion in deals a day earlier at the air show. Air Senegal announced a memorandum of understanding to purchase eight Airbus A220 in an order worth US$734 million at list price.

Airbus also secured purchases from British budget carrier easyJet, which said it will order 12 additional A320neos it previously had options to buy, pushing the airline’s total order for the single-aisle plane to 159. The airline operates across Europe with a fleet of entirely Airbus aircraft, serving 155 European airports.

The list price of the A320neo in 2018 was US$110.6 million, making the order for 12 worth about US$1.3 billion. Airlines, however, typically negotiate better prices.

Also Tuesday at the Dubai Airshow, Saudi budget carrier flynas announced a firm order of 10 Airbus A321XLR, a deal estimated at US$1.4 billion at list price. The purchase stems from a previous agreement for purchasing rights of the A320 narrowbody, bringing flynas’ order of the jets to 90.

Separately, Ghana announced it will launch a national airline early next year with three new Boeing long-haul, widebody 787-9 Dreamliners.

Ghana’s Aviation Minister Joseph Kofi Adda described the airline as a “home-based carrier” and not a “national carrier”, explaining that the Ghanaian government will own just 10 per cent of the company with the remaining 90 per cent coming from private investment.

Speaking at the Dubai Airshow alongside an executive from Boeing, the minister said the still unnamed airline aims to start domestic and regional operations in the first quarter of 2020. Ghana currently has domestic flight routes on Africa World Airlines.

The new airline will expand its routes over time to include Europe, North America and possibly Asia, the minister said.

AP