Boeing sued for $ 336 million for canceled 737 MAX order

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FILE PHOTO: The Boeing logo is displayed on a screen at the New York Stock Exchange (NYSE) in New York, the United States, on August 7, 2019. REUTERS / Brendan McDermid / File Photo

(Reuters) – Boeing Co (TO PROHIBIT) was sued on Wednesday for $ 336 million by a Kuwaiti leasing company which accused him of having wrongly refused to reimburse advances on an order now canceled for 40 of its 737 MAX in difficulty.

In a complaint to the Chicago Federal Court, ALAFCO Aviation Lease and Finance Co (ALAF.KW) accused Boeing of breaching the contract for maintaining payments despite its failure to deliver the aircraft or provide a revised delivery schedule.

ALAFCO announced that it had canceled its order on March 6 because Boeing had not delivered nine planes on time. He said that Boeing had resisted his claim that the problems amounted to “non-excusable delay” which would justify the reimbursement.

Boeing did not immediately respond to requests for comment.

The Chicago-based company suspended deliveries of 737 MAX in March 2019, when the Federal Aviation Administration immobilized the plane after the deaths of 346 people in collisions with two 737 MAX planes operated by Lion Air and Ethiopian Airlines.

Boeing is now also struggling with the coronavirus pandemic, which has forced it to cut production due to declining demand, financial difficulties for airline customers and logistical hurdles related to aircraft delivery.

ALAFCO buys large commercial aircraft and leases them to airlines. Its main owners are the Kuwait Finance House (KFH.KW), Gulf Investment Corp and Kuwait Airways Corp, according to its website.

Boeing shares closed down $ 1.36 to $ 134.97 on Wednesday. They have lost more than two-thirds of their value since early March 2019, just before the grounding of the 737 MAX.

Jonathan Stempel reports in New York; Editing by Tom Brown

Our standards:Principles of the Thomson Reuters Trust.

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