Russian aircraft leasing firm sues Boeing to terminate 737 MAX contract

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Russian aircraft leasing firm sues Boeing to terminate 737 MAX contract

Russian aircraft leasing firm has filed a lawsuit against Boeing in Chicago court. The company wants to cancel its purchase of the grounded 737 MAX planes in the first court case of its kind after two deadly air crashes involving the planes.

Avia Capital Services is seeking to terminate a contract for the purchase of 35 Boeing 737 MAX aircraft over safety concerns, according to a report by Financial Times. The company, a subsidiary of Russian state conglomerate Rostec, claims the two deadly crashes of 737 MAX that resulted in the deaths of 346 people earlier this year were the result of “negligent actions and decisions of Boeing” in both designing a plane that was “defective” and “withholding critical information” from the US aviation safety regulator during certification.

The Russian firm alleges that the US manufacturer “intentionally” hid crucial information regarding the airworthiness of the MAX planes from customers to guarantee its sales. The complaint was filed in Cook County Circuit Court in Chicago on Monday.

It also stated that it gave Boeing a deposit of US $35 million (€31.5 million) to secure the order, which was placed prior to the grounding of the MAX model, and is now demanding that this amount to be returned with interest. It is also asking for $75 million (€67.5 million) in compensation for lost profits, with a total of $115 million (€103.5 million) in compensatory damages, as well as “several times the amount” in punitive damages. The lawyer representing the Russian company says several more similar lawsuits will be brought against Boeing in the nearest future.

“I think you will see a number of other operators filing suit in coming months. This will be the first of many to come,” Steven Marks of the Miami aviation law firm Podhurst Orseck said.

The ill-fated 737 MAX was grounded in March after two deadly air crashes in Ethiopia and Indonesia, which resulted in the deaths of 346 people. Official investigations into the accidents are ongoing, with Boeing unable to deliver any of its MAX jets until regulators have declared them safe. The company posted its biggest quarterly loss last month and even warned that it may have to shut down production of the MAX completely if regulators don’t come up with an assessment soon. A number of airlines have demanded compensation for failed plane deliveries, while Saudi Arabian budget carrier Flyadeal became the first airline to cancel its order of 50 jets in favor of a deal with Boeing’s arch-rival in the plane manufacturing field, Airbus.

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