A dispute arose between Boeing and a Russian cargo carrier Volga-Dnepr over an order for a 747 jumbo freighter and three large 777 freighters having a total worth more than $600 million at standard pricing.
Volga-Dnepr alleges that Boeing has kept more than $146 million as advance payment while taking money from the new buyers too and thus seeks an injunction to stop Boeing from selling the planes.
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| Boeing 777 Freighter Source URL: https://commons.wikimedia.org/wiki/File:Boeing_777_Freighter_test_flight.jpg Source:https://www.flickr.com/photos/42809587@N00/2719106712 License URL: https://creativecommons.org/licenses/by-sa/2.0/ Credit: Andrew W. Sieber | Photographer |
How this started?
This standoff between the two developed earlier this year when the Russian cargo carrier Volga-Dnepr told Boeing that they couldn't secure financing for their orders due to Covid-19 pandemic.
On 17th January, Volga-Dnepr informed Boeing to rescind the purchase agreement and they sent another letter to Boeing on 22nd January notifying that they "could not fulfill its contractual obligations".
These letters conveyed to Boeing that the orders were definitively cancelled.
These letters conveyed to Boeing that the orders were definitively cancelled.
Later, Volga-Dnepr managed to secure financing for the four aircraft as the demand for large freight aircraft increased in early April.
They revoked their earlier statement and declared themselves ready to take delivery of 747 Freighter on 13th April.
But much to their horror, they realized that Boeing was reselling those aircraft to another buyer, for which Volga-Dnepr thus filed a suit last week in Federal court in Seattle.
They revoked their earlier statement and declared themselves ready to take delivery of 747 Freighter on 13th April.
But much to their horror, they realized that Boeing was reselling those aircraft to another buyer, for which Volga-Dnepr thus filed a suit last week in Federal court in Seattle.
In response to the allegation imposed, Boeing asserts that Volga-Dnepr “literally walked away from two purchase agreements with Boeing back in January and February of this year ― one for 747-8Fs and the other for 777Fs.”
Moreover Boeing said that a meeting in London was held on 11th February where-in Volga representative Tatiana Arslanova told Boeing and a leasing company to "re-market and re-sell the 777 Freighter because Volga will not be taking delivery."
Moreover Boeing said that a meeting in London was held on 11th February where-in Volga representative Tatiana Arslanova told Boeing and a leasing company to "re-market and re-sell the 777 Freighter because Volga will not be taking delivery."
It can be clearly seen that the letters sent earlier in the month and statement given by Tatiana Aslanova are two evidences which are against Volga-Dnepr.
Boeing is confident that Volga is using the pandemic as a cover for its financial failings, claiming that from 2016 onward, it had “repeated problems obtaining financing that prevented it from adhering to the contractual delivery schedules for airplanes under contract.”
Boeing is confident that Volga is using the pandemic as a cover for its financial failings, claiming that from 2016 onward, it had “repeated problems obtaining financing that prevented it from adhering to the contractual delivery schedules for airplanes under contract.”
Boeing finalized to resell the 747 Freighter which Volga-Dnepr refused and had scheduled delivery of the plane to UPS on 4th May.
On Tuesday, Chief Judge Ricardo Martinez denied the restraining order by Volga, giving Boeing an initial victory and noting that Volga “has not demonstrated a likelihood of success on the merits of its breach of contract claim.”
While this situation continues to be a point of discussion, Boeing has novel customers to take the 777Xs and 787s.
As the aviation industry is hit severely due to pandemic, consequently Boeing's order backlog has grown by more than 500 planes. Hundreds of 737Max orders were cancelled amid Covid-19 and now a deal for 777Xs and 787s will surely boost the morales of the jet-maker.
While this situation continues to be a point of discussion, Boeing has novel customers to take the 777Xs and 787s.
As the aviation industry is hit severely due to pandemic, consequently Boeing's order backlog has grown by more than 500 planes. Hundreds of 737Max orders were cancelled amid Covid-19 and now a deal for 777Xs and 787s will surely boost the morales of the jet-maker.
What are your thoughts on the dispute between Boeing and Volga-Dnepr and how do you see the Boeing company going forward with its novel 777X?
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