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Published on Wednesday, June 3, 2020

TUI agrees 737 MAX compensation deal with Boeing






 


TUI has reached a deal with aircraft manufacturer Boeing to compensate it for the grounding of the 737 MAX aircraft.



While details of the agreement are confidential, TUI said it provides compensation which covers 'a significant portion' of the financial impact, as well as credits for future aircraft orders.



The compensation will be paid over the next two years, said TUI.



The two parties have also agreed a revised delivery schedule for the 61 737 MAX aircraft on order, meaning that TUI will get fewer 737 MAX deliveries from Boeing than previously planned in the next several years.



As a result, fewer than half of the originally planned 737 MAX aircraft will be delivered to TUI in the next two years.



On average, compared with the original scheduling, the 737 MAX deliveries will be delayed by approximately two years.



"This will significantly reduce TUI's capital and financing requirements for aircraft in the coming years and supports TUI's plan to reduce the size of fleet of its five European airlines in the wake of the corona crisis," TUI said in a statement.



Group CEO Fritz Joussen added: "We have reached a fair agreement that strengthens our long-standing relationship with Boeing. The agreement provides TUI with compensation for a large part of costs that were incurred due to the grounding of the 737 MAX.



"The new delivery schedule gives us considerable flexibility because we will have fewer new aircraft delivered in the next years. This enables TUI to rapidly adapt its fleet growth to the currently challenging market environment. And it supports our plan to downsize the aircraft fleet and reduce the capital requirements for aircraft investments in the Group."



In March 2019, a worldwide flight ban was imposed on the 737 MAX, which also had an impact on the operations and fleet renewal plans of TUI Airlines. At the time of decommissioning, TUI's airlines had 15 737 MAX aircraft in their fleets, with eight more scheduled for delivery in 2019.
 

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