Icelandair not Required to Receive All 737 MAX Jets

One of Icelandair's Boeing 737 MAX aircraft.

One of Icelandair's Boeing 737 MAX aircraft. mbl.is/​Hari

Vala Hafstað

Should Boeing’s delivery of the 737 MAX aircraft ordered by Icelandair Group be delayed more than 12 months, based on current agreements, then the latter has the option to cancel the purchase, the financial section of Morgunblaðið reports.

The 737 MAX aircraft have been grounded since March 12 of last year, following two deadly crashes, and since then Boeing has not delivered a single one of them.

According to an agreement between Boeing and Icelandair Group, three of the jets were to be delivered in 2018, six in 2019, five in 2020, and two in 2021. By the time the jets were grounded, six of the aircraft had already been delivered.

Last year, the airline was expected to receive two aircraft by the end of March and one in April. Since more than 12 months have passed since their scheduled delivery, Icelandair is not required to receive them.

The five aircraft, scheduled for delivery this year, were to be delivered no later than by the end of March. Therefore, more than ten additional months must go by before Icelandair is released of any obligation to purchase them.

According to the airline’s latest annual financial statement, Icelandair Group has already paid Boeing USD 28.4 million for aircraft yet to be delivered. Should the airline decide to cancel the purchase, it would have to negotiate the terms of a refund with an aircraft financing company.

At the end of January, Boeing announced that it expected the 737 MAX jets to be allowed to fly again by mid-year. The airplane manufacturer’s latest quarterly statement, however, doesn’t expect them to start flying until the third quarter of the year.

It is not clear whether Icelandair Group plans to cancel its purchase, but the company is seeking compensation from Boeing, due to the latter’s failure to keep its agreement and losses the airline has suffered as a result of the grounding. 

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