Kuwait-based Alafco Aviation Lease and Finance Co has revealed it has ended a $336 million legal dispute with US aerospace giant Boeing over a cancelled order, Arabian Business reported.
The company, whose owners include Kuwait Finance House, Gulf Investment Corporation and state airline Kuwait Airways, made the announcement to the Kuwait Bourse in a written note.
The 737 Max was supposed to be Boeing’s replacement for its tried-and-true 737 line of narrow-body planes. But after 346 people were killed when two of the planes crashed within five months last year, the plane was grounded worldwide and Boeing halted production.
Boeing was supposed to start delivering the Max planes to Alafco in March 2019, according to the original lawsuit filed in federal court in Chicago. But that was the month of the second Max crash, which is when Boeing suspended delivery.
Although details of the latest agreement are bound by confidential clauses, according to the filing, Alafco has halved its original order for 40 Boeing 737 jets down to 20.
It said: “Alafco’s order book of Boeing aircraft has now been reconfigured to align it with current market dynamics. This includes reducing the order book from 40 to 20 aircraft and the revision of delivery dates.”
Alafco added that it was “looking forward to a long-lasting and mutually beneficial relationship with Boeing”.
Chicago-based Boeing has struggled since the Max crashes, which were blamed on faulty flight control software, inadequate flight manuals and lax regulation. It has been further challenged, along with the entire airplane industry, by the coronavirus pandemic, as air travel worldwide plummeted and demand for new planes has sunk.