Posted on: 04 June 2019 by Glenn Sands
LARA editor Glenn Sands provides a summary of the latest happenings across the low-fare airline and regional aviation industry.
Boeing’s compensation to airlines for the grounding of the 737 MAX may include aircraft services, training support, flexible delivery dates or cash, according to the company’s CEO, Dennis Muilenburg.
His comments on 29 May were made during an investor conference and hinted at how Boeing might ease the pain for airlines who have faced extra costs and the logistical shuffling of assets for the past three months after removing the MAX from their daily schedules.
“Obviously, our clients’ fleet schedules have been interrupted by the grounding. There are a number of different ways that we can address these issues,” Muilenburg said. “In some cases, cash may be part of the solution.”
Although he was careful not to divulge any exact figures, suggestions are that the amounts involved will not significantly impact Boeing’s finances.
“I don’t see this as an additional material event for us,” Muilenburg stated.
It’s a positive approach towards what may be one of the most significant and tragic commercial aviation accidents within the last decade.
But the long-term impact on Boeing of the MAX crashes and the subsequent failings within the company’s engineering and training departments will not be known until the end of the year.
It’s accepted that Boeing continued with the 737 MAX programme even though some departments allegedly knew the MCAS may be faulty. Boeing pressed on regardless, without explaining any specific issues about the system to pilots. Muilenburg stated that the MCAS was “fundamentally embedded into the handling qualities of the airplane. So when you trained on the airplane, you were being trained on MCAS. It’s not a separate system to be trained on.” But for many observers this comment added little value to the debate.
It’s interesting to compare this to Mitsubishi’s approach to resolving current ongoing issues with its first regional jet. Realising that the 90-seat MRJ is the wrong way to gain access to the massive US-regional market, the company has gone back to the drawing board to re-work the design into a 70-seater called the Space Jet. It’s a bold decision and it will delay the programme by at least 18 months, but they may well end up with a re-designed, re-branded regional winner.
President Trump said Boeing should rebrand the 737 MAX series, prior to its re-launch. That’s not going to happen, so what is Boeing going to do next?
The editor’s comment is published weekly as an accompaniment to the LARA e-newsletter. If you do not currently receive our email updates, you can subscribe here.