Chicago-based United Airlines had planned to resume service with the grounded Boeing 737 MAX in early November, but is now targeting December 19 instead. Grounded by safety regulators since March in the wake of two crashes in Indonesia and Ethiopia that claimed 346 lives, the carrier seriously hopes flights could resume before Christmas.

 

Airlines in the United States have had to kill thousands of flights during what has been one of the busiest summer-travel seasons on record. Even if United’s wish is granted and its fleet of 737 MAX could take off by December 19, it would have cancelled a staggering 9,500 flights from September to December 19 alone. That speaks volumes about the impact of the Boeing jets being grounded.

 

However, don’t hold your breath. Although Boeing has developed a fix for the software system implicated in both crashes, it’s not easy for the MAX to gain regulatory approval to resume service, not after what had happened. Once regulators allow the MAX to return, it could take at least 6 weeks for airlines to install the new software, train pilots, and get their aircraft ready to fly again.

Federal Aviation Administration (FAA), the agency that oversees American airspace, is notorious for ensuring the safety of civil aircraft in operation. However, in the case of Ethiopian Airlines Flight 302 (killed 157 people on Mar 10, 2019) and Lion Air Flight 610 (killed 189 people on Oct 29, 2018), FAA’s reputation has taken a plunge for obvious reason.

 

Acting FAA Administrator Daniel Elwell declared there was “no basis to order grounding” of the Boeing MAX-8, the best selling model that crashed minutes after take-off from Addis Ababa, Ethiopia – despite the fact that an exact model of the plane belonging to the Indonesian budget carrier Lion Air had also crashed in a similar fashion in October, 2018.

 

FAA’s action, backing the airworthiness of Boeing’s 737 MAX jets, was facing mounting criticism until President Donald Trump ordered the grounding of the aircrafts in the U.S. Was FAA trying to protect the U.S. aircraft manufacturer to the extent of ignoring its own professionalism? As it turned out, Boeing knew about the software error, but kept quiet about it.

Boeing’s engineers reportedly discovered the error in 2017 but assumed there was no safety risk after a review. The company waited until after the October 2018’s Lion Air crash to begin telling airlines that the alert system had an issue. It waited another 5 months – until the Ethiopian Airlines crash – to reveal more details. Even then, it would take another 6 weeks before the public learned of the issue.

 

Hence, it’s not hard to understand why the FAA would be more stringent than usual in approving the airworthiness of the Boeing 737 MAX. Some airlines, including Southwest Airlines Co. and Air Canada, have given up on the prospect of flying the Boeing 737 MAX this year. But even if the FAA finally gives its green light by the end of this year, it would not be business as usual.

 

Based on a survey done by investment bank UBS, about 70% people have expressed hesitation to fly on Boeing 737 MAX jet. In the same breath, 41% of Americans say they would only consider flying on the 737 Max after 6 months of safe operation. That means they would wait and see others as guinea pig takes to the sky before putting their own lives on the aircraft.

But on the ground, Boeing has another problem – fighting off lawsuits which could potentially prolong the return of public confidence. Steven Marks, a lawyer representing Avia Capital Services, said that the company no longer wants to take delivery of its order of 737 Max jets. He said – “The public doesn’t have any trust in it, the client can’t use it. It has no value to them.”

 

Believed to be the first lawsuit arising out of the safety crisis at the U.S. manufacturer, Avia’s lawsuit filing says that two aircraft crashes, with extensive loss of life, were due to “negligent actions and decisions of Boeing”. It also says the 737 MAX is “defective” and that crucial information was withheld from the U.S. Aviation Safety Regulator.

 

In its lawsuit filed in Cook County Circuit Court in Chicago on Monday, Avia Capital Services is claiming US$115 million in compensation plus punitive damages. The aviation leasing firm wants to cancel its order for 35 MAX 8 jets, and demands a cash deposit of US$35 million to be returned with interest, along with US$75 million in lost profits.

Avia is also asking “several times” that amount in punitive damages, which could cost Boeing hundreds of millions of dollars. Claiming breach of contract in connection with its grounded 737 MAX, the Miami aviation law firm Podhurst Orseck representing Avia disclosed that Boeing had offered compensation but it was inadequate.

 

Thanks to the grounding, its deliveries of 737 MAX have already fallen by 37% in the first 6 months of 2019. And since the crash and safety scandal, Boeing has not reported any new order for the MAX planes. The Wall Street Journal reported that the situation was so bad that more than 150 undelivered MAX jets are parked at sites around the United States.

 

Along with about 380 MAX planes belonging to airlines in the U.S. which remained grounded by regulators since March, there are a whopping 530 planes of similar model eating dust on the ground, including car parks. In July, Flyadeal, a low-cost airline owned by Saudi Arabia flag carrier Saudia, becomes the first airline to officially drop Boeing 737 MAX order – cancelling 50 MAX jets worth US$6 billion.

 

Other Articles That May Interest You …

• Historic $2.9 Billion Loss! – How Ignoring $2 Million Safety Features Create Nightmare To Greedy Boeing
• Zero New Orders For 737 MAX – Airbus To Overtake Boeing As World’s Biggest Plane Maker
• It’s Not Over Yet – Lawsuits Are Piling Up Against Boeing For Misleading Investors & Covering Up
• How China Uses The Purchase Of 300 Airbus Jets To Pressure Both European Union & The U.S.
• Profit-Hungry Boeing – Crashed 737 Max Jets Did Not Have 2 Safety Features Because They’re Optional
• FAA Protecting Boeing? – Despite Assurance, Airlines Around The World Suspend Boeing MAX-8 Jets
• Boeing In Trouble – Stock Sinks In Worst Fall Since 2001 After Best Selling 737 MAX-8 Jet Crash
• 3 Bailouts Involving RM30 Billion – Here’s Why Malaysia Airlines Should Be Shut Down Or Sold Off
• Secret Revealed – The Secret Chambers Where Pilot & Cabin Crew Rest & Sleep (Photos)

Tweet

August 31st, 2019 by financetwitter

If you enjoyed this post, what shall you do next? Consider: