UPDATE 1-Russia's Rostec unit ready for out-of-court deal with Boeing on 737 MAX order

Reuters by Yahoo ^ | August 27, 2019

[NorseViking]

MOSCOW, Aug 27 (Reuters) - A unit of Russian conglomerate Rostec said on Tuesday it was ready for an out-of-court settlement with Boeing over its order for 35 Boeing 737 MAX jets, a spokesman for Rostec's subsidiary Avia Capital Service told Reuters.

Boeing MAX 737 jets have been grounded worldwide and airlines are cancelling multimillion contracts following crashes in October and March that killed 346 people.

Earlier on Tuesday, Rostec said its unit had filed a lawsuit in the United States to cancel its order for the 35 MAX jets. The Financial Times, which first reported the move, said Avia Capital Service gave Boeing a cash deposit of $35 million.

A spokesman for Avia Capital Service told Reuters that delivery of the jets was first scheduled for October 2019 but was moved to March 2022. The Rostec unit had paid Boeing a deposit and was suffering losses from non-delivery, he said.

[mikey_hates_everything]

Boeing must have great lawyers writing their contracts. How could you not be able to cancel and get your deposit back on a 737 MAX order at this point?

[mikey_hates_everything]

Or Boeing’s just not abiding and forcing customers into a suit...

[cymbeline]

Or Boeing asserts that there’s never been anything wrong with the plane so there’s no basis for cancelling the contract.

[monkeyshine]

I would guess that some eventuality such as “being grounded by a government for limited duration” would be written into the agreements.

There was a time when people and companies would put a deposit on future plane deliveries, only as an “option” to sell their slot to someone else as the date got closer.

There seem to have been a lot of screw ups made with this MAX; from pushing aside engineers with decades of experience and throwing in “options” that should be redundant (and of negligible additional cost) to hiring 3rd world programmers to write the code that can basically take control of the craft. And, the FAA basically just nodded along as BA made the wings bigger, repositioned the bigger engines, shifted the weight balance of the plane, took out redundant measuring instruments, and threw in all kinds of new code to the systems - while saying “it’s the same plane as the 737” to avoid excess scrutiny and delays.

These delays has allowed AirBus to catch up with their own more fuel efficient designed mid-range single aisle craft.