Boeing announced last week that it might suspend production of the 737 MAX if it cannot convince regulators that it has resolved all the problems affecting its model. Boeing has already announced that it faces additional costs of more than eight billion dollars linked to two accidents that killed 346 people. The manufacturer has just announced losses of three billion dollars in the last quarter. The American aircraft manufacturer had sold 36 Boeing 737 aircraft up to April, compared with 290 during the same period in 2018. The exceptional order from British Airways for 200 Boeing MAXs saved the day in June.
There is also another practical question to consider: where should store the new jets coming off the assembly line at Seattle ? More than a hundred are now grounded on the tarmac at Boeing's Everett plant. And then there are the 300 or so aircraft parked by airlines around the world...
The New York Times recently quoted Boeing's CEO, Dennis Muilenburg which stated " consider several options, including temporarily halting production of MAX ". The decision will in fact depend on the date on which the aircraft return to service and on the storage options for the newly-built aircraft. Boeing has already slowed production of the 737 to 42 aircraft per month, compared with 52 previously. The company had announced a few days ago that the Boeing 737 MAX could fly again in October, but this was immediately denied by the US Federal Aviation Administration.
Boeing is also facing the wrath of its airline customers. Many have had to review their flight schedules, with drastic capacity cuts in certain sectors. Southwest Airlines has just announced close its New York base-Newark, due to a shortage of aircraft in its fleet.
According to the Wall Street Journal, the grounding of the Boeing 737 MAXs in July resulted in the115 daily flights cancelled for American Airlines, 100 daily frequencies for Southwest and 45 daily flights for United Airlines. According to these three airlines, the situation will continue to deteriorate. For October, American Airlines plans to cancel 115 flights a day, United 95 flights and Southwest 180 flights...
In Europe, Norwegian, Ryanair and TUI.com are among the airlines most affected, having to reduce the number of flights they operate, possibly closing bases or leasing other aircraft at high cost. Other airlines affected by the grounding include Icelandair and Turkish Airlines. Boeing has announced that it will have to pay the equivalent of 5.6 billion dollars in compensation to the airlines affected by the grounding of the Boeing 737 MAX.
