Billion-dollar bill for Boeing over MAX reimbursements

Boeing’s reimbursements to the airlines over the grounding of the 737 MAX series will approach $1.4 billion, if the world-wide grounding is lifted in October.

Bloomberg analysts stated on 22 May that: “We estimate the cost based on typical operating profit per aircraft, per day and benchmarked to Southwest Airlines, the largest operator of the MAX.”

It is presumed that the compensation is expected to take several forms, including order modifications, and won’t be fully allocated until “expected deliveries are made,” which could take a further 12 months. Boeing stopped MAX deliveries when the fleet was grounded but has continued to produce them.

The 370 MAX examples that were in service with airlines have been grounded since mid-March. Airlines have had to extend lease agreements, cancel flights, defer maintenance and re-shuffle aircraft assignments in order to cover the loss in capacity.

Boeing presented its proposed flight-control software upgrade package to the FAA, and will discuss details of the upgrades with global regulators today.

A timeline for the return-to-service of the MAX series has not yet been determined. Regulators would have to grant an all-clear by the end of next month or early July for the aircraft to be back in the air by October. It is expected that the FAA will be the first to lift the ban and will likely be followed by the EASA.

What remains to be determined is the level of training that pilots will undergo before returning to a MAX flight deck. An initial FAA report stated that additional simulator training sessions were not necessary to understand the modified MCAS, but it is understood that some regulators will insist on them.

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