GE Capital Aviation Services (GECAS), a unit of General Electric (NYSE:GE), has announced that it is canceling orders for 69 737 Max aircraft from Boeing Co. (NYSE:BA). The move to "rebalance" its order book for the 737 Max comes just days after Boeing reported that it had received 150 order cancellations for the 737 Max in March alone.
Earlier this week, GE withdrew its 2020 financial guidance and announced plans to firm up its financial position as it works through impacts from the ongoing pandemic. It said it used some of the $20 billion in proceeds from the sale of its BioPharma unit to Danaher Corp. (NYSE:DHR), to repay intercompany loans of $6 billion to its GE Capital unit, of which GECAS is a part.
The 69 canceled aircraft list for between $6.9 billion and $9.3 billion prior to customer discounts, according to BNN Bloomberg.
GECAS President and CEO Greg Conlon said that the order change is to adjust its fleet to better match current global demand. Even with the cancellation, GECAS maintains 29 of the Max aircraft in its fleet, with 82 more remaining on order. "We remain fully committed to the 737 MAX program and our valuable, long-term partnership with Boeing," Conlon said.
Yesterday, Boeing announced a plan to restart production it had suspended due to the pandemic at its Puget Sound facility, including work on the 737 Max program.