Yes folks we are going to be in for a wild ride.
21 May 2025
20 May 2025
Boeing Purchase Authorization Contract Review.
Disclaimer. This analysis is based on a review of publicly available information ONLY.
Executive Summary
This report provides a comprehensive legal and commercial analysis of publicly available aircraft purchase agreements between Boeing and a selection of its airline and leasing customers. The agreements span legacy contracts (TWA/McDonnell Douglas) to modern lessor and low-cost carrier deals (e.g., Air Lease Corporation, Allegiant Air). Key clauses such as termination rights, refund provisions, delivery terms, and performance guarantees are compared to identify contractual flexibility and risk allocations.
Contracts Reviewed
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TWA (via McDonnell Douglas)
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Delta Air Lines
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United Airlines:
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Purchase Agreement No. 03776 (2012)
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Purchase Agreement No. 04761 (2018)
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Purchase Agreement No. 03860 (2012)
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Purchase Agreement No. 04815 (Date unspecified)
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LAN Airlines (LATAM)
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Air Lease Corporation
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Allegiant Air:
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Purchase Agreement No. PA-05130 (2021)
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Clause Comparison Overview
The table below summarizes key contract provisions across
all reviewed agreements. Categories include termination rights due to delays or
certification loss, refund mechanisms, force majeure treatment, delivery
protections, and governing law. For ease of comparison, a companion spreadsheet
provides a detailed clause-by-clause breakdown.
Assessment
I have re-read 3 of them (TWA (717), Delta (737-800) and United (737 Max-9). In all cases a 6 month delay was grounds for termination and refund which is pretty standard. In the case of United there was also a clause for liquidated damages. Disclaimer these are public copies so there is no record of any comfort letter and significant portions of the contract of these agreements are redacted. However, they conform largely to the structure of versions I have seen. I note that there were several other airlines who also were in the same situation. Specifically LOT, AirEuropa and SmartWings. It should be noted that ultimately these airlines have indeed operated their 737 Maxs.
Key Takeaways and Observations
- United Airlines' later agreements offer stronger
protections and refund mechanisms, especially related to FAA certification.
- Air Lease Corporation agreements are structured with lessor flexibility,
including deferrals and remarketing rights.
- Delta’s agreements strike a middle ground, balancing airline leverage with
Boeing delivery flexibility.
- Allegiant’s contract reflects modern low-cost carrier concerns, focusing on
performance guarantees and refund rights.
- TWA (MDC-era) agreement is outdated and provides limited buyer protection
compared to modern Boeing contracts.
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