After suffering billions of dollars in losses due to litigation and canceled orders, Boeing has finally gotten a long-awaited vote of confidence for its troubled 737 Max planes with a new order from International Airlines Group. The reputation of its newly launched long-range airplanes was previously tarnished by two fatal crashes allegedly caused by faulty software.
Following the crash, airlines and airports all over the world grounded all 737 Max planes. The company also faced lawsuits from the families of the victims of the crash and from various airlines.
Boeing has since submitted a proposed software fix for its planes and an upgraded pilot training program. Regulators are currently reviewing Boeing's proposed fix. Boeing's planes have yet to be given the green light to go back to service.
Despite the problems, International Airlines still placed an order of 200 units of 737 Max jets. International Airlines announced its letter of intent to purchase the jets at the ongoing Paris Air Show.
The airline currently has mostly A320 aircraft in its fleet, bought from Boeing's rival Airbus. The airline currently doesn't have any wide-body jets in operation, which means that the order may be indicative of a major shift within its business.
Based on Boeing's list price for its 737 Max jets, International Airlines' order would likely cost more than $24 billion. International Airlines did not comment on how much exactly Boeing had charged them for the order. However, experts believe that Boeing may have offered its planes to International Airlines at a sizable discount.
According to International Airlines CEO Willie Walsh, his company has the utmost confidence that Boeing will be able to resolve its current issues and that its planes should successfully be able to return to service within the coming months. Boeing's head of commercial planes, Kevin McAllister, responded to International Airlines' statement by thanking the company for placing its trust and confidence in its 737 Max models and in everyone at Boeing.
Since Boeing's 737 Max planes were grounded worldwide, the company has not reported any sales of its best-selling model. Boeing did manage to close a contract with Korean Air in late March, but that order was for the 30 units of the company's 787 Dreamliner models.
The company has reportedly not stopped producing the 737 Max jets, but they had apparently decided to reduce capacity. Boeing reportedly has more than 5,000 units on order after it launched the new model. However, some customers had decided to cancel their orders following the fatal crashes.
