Before its shutdown, Jet Airways had a sizeable order for the 737 MAX booked with Boeing. The airline had ordered more than 200 MAX 8 and 9s to replace its fleet of older 737s. So what happened to the airline’s order following its collapse? Let’s find out.
What happened to the order?
When the 737 MAX was officially grounded in March 2019, Jet Airways was still operating flights and planning to take more deliveries of the type. However, the airline quickly ran out of funds and grounded all flights in mid-April 2019, putting its 737 MAX order in jeopardy. At list price, Jet Airways’ 737 MAX order was valued over $26 billion, a sizeable order for Boeing.
Jet Airways operated a narrowbody fleet of 737 Next-Generation aircraft, with the 737-800 being the most common plane. The order for the 737 MAX was meant to slowly phase out the older aircraft and deploy the MAX on key, high-revenue routes.
The grounding and subsequent bankruptcy proceedings of Jet Airways in May resulted in the cancelation of the order with Boeing. 182 aircraft were removed from Boeing’s order book as it became clear Jet Airways wasn’t going to bounce back soon. However, now that Jet Airways has a new owner, could the order be restored?
Contractual liability
While the Jet Airways order was removed from Boeing’s tallies, the manufacturer says the order isn’t technically “canceled”. In a statement to Live From A Lounge, Boeing said,
“The Jet Airways orders are not cancelled. Our contractual agreements with Jet Airways remain in place. The update to Boeing’s Orders and Deliveries website reflects the alignment with the accounting standards for recognizing revenues.”
The order was actually transferred to Boeing Capital, the manufacturer’s leasing subsidiary. This means a new Jet Airways could hypothetically reinstate this order in the future, if it chose to do so. However, this is highly unlikely for the next few years as the airline plans to begin operations with a smaller fleet.
What will happen to the parked planes?
Boeing was in the process of assembling several Jet Airways 737 MAXs, including two that were already painted and parked as of April 2019, according to the Puget Sound Business Journal. Up to two more aircraft were reportedly in assembly by Boeing when the airline suspended operations. This means at least four 737 MAXs with Jet Airways livery will not go to the airline.
These planes are known as “whitetail” aircraft, planes which are built but have no customers to take delivery, usually due to cancelations or bankruptcy. Boeing has many whitetail aircraft in storage due to the widespread cancellations of the type this year and due to the decision to continue production after the grounding.
Jet’s fleet of 737 MAXs will likely be resold as a whitetail aircraft at some point in the future since the carrier remains highly unlikely to take delivery even after its revival.
Did you ever fly on Jet Airways’ 737 MAX? Let us know in the comments below!
