737 Cancellations

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TheRealPapaK
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737 Cancellations

Post by TheRealPapaK »

As more airlines go past the one year past delivery mark with the 737 and can cancel their orders without penalty, will Air Canada cancel more than the 11 they already cancelled since there should be a flood of aircraft on the lightly used market shortly? Or is the Boeing compensation to the airline due to nondelivery making it worth it to hold on to the orders by helping their overall cashflow?

It seems like there could be some benefit of getting out of the deal since the public may not want to fly on it, you wouldn't have to pay for the planes during these tough times(although the financing is already secured for the 737) while holding on to planes that are paid for while fuel prices are low, keep a one type fleet since Rouge will fly the 320 and main line will keep the A321's.

Or are there already too many on the property to make this worth it?
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Eric Janson
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Re: 737 Cancellations

Post by Eric Janson »

There have been a lot of 737Max order cancellations in the last few weeks.

With the low fuel price there is no need for this aircraft as the operating economics of the older models are now better.

Lease Rates will drop dramatically and there will be large numbers of older aircraft available. This means there is no business case for the 737Max (which still does not have a return to service date).

I now expect Boeing to go Bankrupt - either late this year or early next year.
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BE20 Driver
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Re: 737 Cancellations

Post by BE20 Driver »

Eric Janson wrote: Tue Apr 21, 2020 1:44 am I now expect Boeing to go Bankrupt - either late this year or early next year.
They make a ton of money from the military side of the operation to go bankrupt. They will struggle but make it through.
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RippleRock
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Re: 737 Cancellations

Post by RippleRock »

I don't anticipate AC cancelling any more 737's. They will take the 50.

Calin stated that the "Boeing deal" has been done, and he will not release any details to the employee groups. You can bet that that deal was based on a "worst case RTS" and an irreversable "no cancellation" clause.
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TheRealPapaK
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Re: 737 Cancellations

Post by TheRealPapaK »

BE20 Driver wrote: Tue Apr 21, 2020 9:51 am
Eric Janson wrote: Tue Apr 21, 2020 1:44 am I now expect Boeing to go Bankrupt - either late this year or early next year.
They make a ton of money from the military side of the operation to go bankrupt. They will struggle but make it through.
The military is not happy with Boeing at all. The KC-46 is years behind schedule, way over budget, multiple Cat 1 issues(Now including leaking fuel tanks), debris in the tanks, and at least 3 years until it can see service.
https://www.businessinsider.com/boeing- ... age-2020-1

On the other side NASA is not happy with Boeing either with their severely botched Starliner performance.

They might get a military contract for a bail out but I doubt the military will do it happily.
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ACpirate
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Re: 737 Cancellations

Post by ACpirate »

I have not checked, but I have been told on Boeing's website there shows cancellation of 35 737's for an unknown carrier
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Ironman2909
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Re: 737 Cancellations

Post by Ironman2909 »

We got 24 planes on property, which as I understand it, are property of AC. We have 26 left to be delivered....so these ones could technically be CNX. I don't think Boeing would retake planes already delivered unless a deal as been made behind the door.

As per Boeing list of March 31st, 2020

http://active.boeing.com/commercial/ord ... iew+Report
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ACpirate
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Re: 737 Cancellations

Post by ACpirate »

Perhaps that math includes the 11 they canceled. Not sure but from the person that told me I wouldn't expect to receive any more - but things are changing daily. I couldn't open the reports and don't see any mention of cancellations on your link.
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sanjet
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Re: 737 Cancellations

Post by sanjet »

At this point, Boeing might have to just give the airlines the aircraft that are already made for free given the next set of delays for the pandemic. Might be cheaper than storing or trying to resale.
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