Chinese aircraft leasing company China Aircraft Leasing Group has paused its order for up to 100 Boeing 737 Max aircraft pending confirmation of the aircraft's flight safety, reports the South China Morning Post. Boeing has also received a downgrade, which is helping to weigh on the stock in pre-market trading.
The Hong Kong-listed company, which is controlled by state-owned Chinese conglomerate China Everbright Group, ordered 50 planes of the ill-fated model in 2017 and expanded that order by 25 planes in December. In addition, there was an option for another 25 planes.
”The purchase has been canceled and we have stopped paying the installments,” China Aircraft Leasing Group Chairman Chen Shuang told the newspaper.
Chen did not provide a figure for how much of the payments the company is withholding. The initial order for 50 planes was valued at $5.8 billion, according to the newspaper.
On Monday, Bank of America Merrill Lynch also downgraded its recommendation on Boeing to neutral from buy, saying the planemaker's problems with the 737s are worse than expected. The bank believes the two crashes involving the plane could mean a reputational loss that costs both pricing power and market share in the long term.
Boeing falls 3.8 percent in Wall Street pre-trade.
Source: di.se
