737 Max Updates and Cancellations

[Guest]

737 Max grounding prompts Southwest to cease Newark service

• 25 July, 2019
• SOURCE: Flight Dashboard
• BY: Jon Hemmerdinger
• Boston

Southwest Airlines will end service at Newark Liberty International airport on 3 November in response to constraints created by the grounding of the Boeing 737 Max, the airline says on 25 July.

Southwest will consolidate its New York operations at LaGuardia airport. The airline has also removed the 737 Max from its schedules for another two months, to 5 January 2020.

Southwest says the Max grounding will cause its 2019 capacity to decline 1-2% year-on-year. The airline had hoped to grow capacity nearly 5% this year.

"As such, we are taking necessary steps to mitigate damages and optimise our aircraft and resources," chief executive Gary Kelly says in a media release. "We will cease operations at Newark Liberty International airport and consolidate our New York City presence at New York LaGuardia Airport, effective November 3, 2019."

"The financial results at Newark have been below expectations, despite the efforts of our excellent team at Newark," Kelly adds.

The airline will give Newark employees the option to transfer to other locations. The Max grounding reduced Southwest's second quarter operating income by $175 million. Southwest earned a net second quarter profit of $741 million, up about 1% year-on-year.

The decision to remove the 737 Max from schedules through 5 January follows "our most-recent guidance from Boeing", Southwest says.

"We currently are assuming regulatory approval of Max return-to-service during the fourth quarter 2019. With this in mind, we will proactively extend the Max-related flight schedule adjustments through January 5," Southwest says.

The change will help the airline ensure it runs a reliable operation during the busy end-of-year holiday travel season, it says. But Southwest adds it may need more time to comply with regulations put in place as part of the Max's regulatory clearance.

"Following a rescission of the Federal Aviation Administration order to ground the Max, we estimate it will take us one to two months to comply with prospective FAA directives, including all necessary pilot training," Southwest says. "The FAA will determine the timing of Max return to service, and we offer no assurances that our current assumptions and timelines are correct."

Southwest and other airlines have pushed back the Max's scheduled return several times. Earlier this month Southwest removed the aircraft through 2 November.

Boeing chief executive Dennis Muilenburg said on 24 July that Boeing is working under the assumption that it will conduct a 737 Max test flight and submit test data to regulators in September.

The airframer expects regulators will need several weeks to review test data and that they will lift the grounding early in the fourth quarter. However, Muilenburg cautions Boeing's timeline remains only an estimate. Regulators grounded the 737 Max in March

[Guest]

Boeing warns of 737 production halt as grounding slams Q2 results

• 24 July, 2019
• SOURCE: Flight Dashboard
• BY: Jon Hemmerdinger
• Boston

Boeing has warned it could decide to stop 737 Max production should the ongoing regulatory review extend beyond the company's current expectation.

The Chicago-based airframer is working under the assumption that regulators will begin lifting the grounding of the beleaguered aircraft in the fourth quarter of 2019.

"Should our estimate of the anticipated return to service change, we might need to consider possible further rate reductions and other options, including a temporary shutdown of the Max production," Boeing chief executive Dennis Muilenburg said on 24 July during the company's second quarter earnings call

[Don Hudson]

Boeing reports its worst ever financial losses as 737 Max crisis continues

Add to list

The fuselage of a Boeing 737 Max aircraft is seen parked at the Boeing facility in Renton, Wash., on July 1. (Lindsey Wasson/Reuters)

By Aaron Gregg

July 24 at 2:59 PM

Software problems that played a role in two deadly plane crashes involving Boeing’s new 737 Max commercial jetliners are proving to be financially calamitous for the Chicago-based aerospace giant, which reported its largest-ever quarterly loss Wednesday.

Boeing lost $3.38 billion for the quarter on $15.7 billion revenue, sending its stock down close to 3 percent by early afternoon. Executives said the company may have to temporarily shut down its 737 Max production, an extraordinary step that would send ripple effects throughout the global aerospace industry. The company already slowed the production rate.

Boeing faces a crisis with no end in sight, as its once-promising 737 Max commercial jetliner has been grounded for well over four months.

“This is a defining moment for Boeing, and we’re committed to coming through this challenging time better and stronger as a company,” Chief Executive Dennis Muilenburg said in a call with investors.

[Boeing 737 crash families make emotional plea to lawmakers: Hold Boeing accountable]

The company is working to fix a host of technical problems related to the plane’s flight control systems, and executives have estimated the planes will be deemed flight worthy early in the fourth quarter of 2019, noting regulators control the timing.

But regulators have provided no firm timeline for when they will allow the planes to fly again, and Boeing executives emphasized the timeline could slip further depending on regulators’ decisions. Airlines are assuming the crisis will continue late into the fall, canceling hundreds of flights every day.

The 737 Max is the newest version of Boeing’s best-selling commercial jet. It was pitched as an even more reliable version of a long-trusted plane, complete with engine updates that made the plane more fuel efficient.

However, the company added a new flight control system called the Maneuvering Characteristics Augmentation System, or MCAS. That system was designed to make the plane behave as similarly as possible to past models, with minimal new training for pilots. It was later discovered that the system can override pilots’ manual controls in certain rare but dangerous situations, pushing the plane into a nosedive.

These problems played a role in the October 2018 crash of a 737 Max 8 that killed 189 people in Indonesia, according to investigation reports and Boeing executives. Then, in early March, another Max 8 crashed under similar circumstances, killing 157 people.

The Federal Aviation Administration ordered that the planes be grounded soon after the second crash. It initially mandated a set of fixes “no later than April,” but the timeline slipped as Boeing and the FAA discovered more problems with the plane’s flight control software.

[Long before the Max disasters. Boeing had a history of failing to fix safety problems]

In the meantime, the financial impacts are mounting for Boeing and its airline customers. Executives said Wednesday they could not estimate how much the crisis would affect the company’s earnings for the year.

Last week the company reported a $5.6 billion charge needed to compensate 737 Max customers. It faces lawsuits from family members of the 346 people who died in Indonesia and Ethiopia aboard the doomed flights, as well as continued scrutiny from Congress.

Teal Group aerospace analyst Richard Aboulafia said Boeing is doing “a decent job” managing the financial fallout of the Max crisis given the tremendous uncertainties at play.

“It’s unclear how much guidance they can offer given how much is out of their control,” Aboulafia said. “[Boeing’s] track record has been that they will say one thing, and then news is broken elsewhere ... from an airline or the FAA."

Issues with the 737 Max overshadowed what was an otherwise successful quarter for Boeing’s other business units. The company’s defense, space and security division saw a 159 percent percent jump in quarterly earnings over the previous year, and the company’s new global services unit continued to grow.

[Guest]

American Airlines profit tops estimates but takes hit from Boeing Max grounding; share prices fall

Published 3 hours agoUpdated 35 min ago

Key Points

• Strong travel demand helped American Airlines post second-quarter profit that came in slightly higher than expected.
• The nation’s largest airline also raises its profit outlook for the year to a range of $4.50 to $6 a share from $4 to $6.
• But the largest U.S. airline says it took a hit from the prolonged grounding of the Boeing 737 Max.
• Airlines had Max planes at the time of the grounding in mid-March.

American Airlines skidded more than 5% Thursday after the nation’s largest airline said it took a hit from the prolonged grounding of the Boeing 737 Max.

Strong travel demand helped it post second-quarter profit that came in slightly higher than expected.

American reported a per-share profit of $1.82 on an adjusted basis, compared with the $1.80 analysts had expected. The Fort Worth, Texas-based airline raised its profit outlook for the year to a range of $4.50 to $6 a share from $4 to $6.Revenue was roughly in line with estimates at $11.96 billion in the three months ended June 30, and up nearly 3% from a year ago. Net income rose nearly 19% from the previous year to $662 million.

The airline canceled thousands of flights in the quarter because of the 737 Max grounding, which dented its pretax income by about $175 million. American has 24 Max planes in its fleet of more than 900 aircraft and 76 are on order. American earlier this month took the planes out of its schedule through Nov. 2. On Thursday, it said the grounding would hit its pretax earnings this year by $400 million.

The airline has been battling a rash of delayed and canceled flights. American also said the union representing its mechanics, with which it is in the middle of contract negotiations, engaged in an “illegal work slowdown” that disrupted operations, allegations the union has denied.

“All of those successes do not negate the fact that we have to fix the operation — that’s a must for our frontline team who is bearing the brunt of this pain and for our customers,” American’s CEO Doug Parker and its president, Robert Isom, wrote to employees announcing the company’s results

[Super 80]

I wonder at what point those SAS 737-600s that are holding down the taxiway at an abandoned airbase will begin to look interesting to WestJet.

[dagger]

I'd watch WS and AC earnings for an indication of how much compensation Boeing is going to owe, either as a cash reimbursement or as discounts, favours, or some combination thereof. The US carriers may be more circumspect of how they handle Boeing - you risk the wrath of the Twit(ter) in chief if you undermine US manufacturing - but the Canadian carriers are going to pin the tail on the Boeing donkey. They may use nice language, but ought to be fairly transparent about the damage being done to their balance sheets. WS is an all-Boeing airline so it may handle things a bit differently than AC. But AC flies both Boeing and Airbus, and Calin is really litigious - meaning he's not afraid to sue. The lawsuit won't be announced upfront, but when it comes, I expect him to go that route and then settle out of court with Boeing. 

[Super 80]

I suspect before all is said and done Boeing with file for Chapter 11 as a defensive move similar to what PG&E did when they were estimated to be exposed to $30,000,000,000 in liability for various calamities.

Except the State of California will probably wind-up the proud owner of PG&E.

[dagger]

3 hours ago, Super 80 said:

I suspect before all is said and done Boeing with file for Chapter 11 as a defensive move similar to what PG&E did when they were estimated to be exposed to $30,000,000,000 in liability for various calamities.

Except the State of California will probably wind-up the proud owner of PG&E.

The only problem I have with that scenario is that it better not stiff their customers or they will have a hard trouble retaining some of them. 

[FA@AC]

5 hours ago, dagger said:

I'd watch WS and AC earnings for an indication of how much compensation Boeing is going to owe, either as a cash reimbursement or as discounts, favours, or some combination thereof. The US carriers may be more circumspect of how they handle Boeing - you risk the wrath of the Twit(ter) in chief if you undermine US manufacturing

Careful!  The Twit(ter) in Chief somehow has quite a few fans on this board.

[Guest]

1 minute ago, FA@AC said:

Careful!  The Twit(ter) in Chief somehow has quite a few fans on this board.

Fans of any one can be quite delusional. and immune to their idols' shortcomings. 

[Tango Foxtrot]

Hard not to be a fan of the "Twit"

Impossible to support it.

[Super 80]

Airbus was very fortunate that the pilot error was egregious in the crashes early in the A320's service life. 

The Captain of Air France Flight 296 went to prison and Air Inter Flight 148 was controlled flight into terrain.

Edited July 26, 2019 by Super 80

[Super 80]

2 hours ago, dagger said:

The only problem I have with that scenario is that it better not stiff their customers or they will have a hard trouble retaining some of them. 

There would be a bailout.

[blues deville]

12 hours ago, Super 80 said:

The Captain of Air France Flight 296 went to prison and Air Inter Flight 148 was controlled flight into terrain.

Interesting. I forgot all about the crash and how the person in charge of that A320 went to jail? In many countries around the world, a business leader responsible for a similar disaster would have resigned by now. 

[Super 80]

I'm sure he will go in time, but at this point they probably don't want to taint another leader.

[Guest]

Boeing needs to 'get its [act] together': Ryanair chief

• 29 July, 2019
• SOURCE: Flight Dashboard
• BY: Victoria Bryan

Ryanair chief executive Michael O'Leary has expressed concern about slips in the timeframe for the Boeing 737 Max's expected return to service.

The budget carrier said on 16 July that it expected the Max to be back in service by December, but after reporting first-quarter results O'Leary today said that this now seemed like it would slip into January.

"We were expecting 58 aircraft for summer 2020; that's now 30 at best. It may well move to 20, could move to 10, or zero if Boeing don't get their **bleep** together pretty quickly with the regulators," he told analysts.

O'Leary cited Southwest's decision to remove the aircraft from its schedules until January, and said the latest he had heard from Boeing was that they now planned to submit the software amendment in October, rather than September.

"It's very difficult to deal with the Boeing delays, because they keep getting delayed further and further. Up until mid-July, we were expecting them to be back flying in September. Now it looks like January next year," he says.

Ryanair will not be taking delivery of any Max aircraft until the aircraft had been declared safe to fly by both US and European regulators, O'Leary says.

If deliveries slip further, that could cut Ryanair's planned passenger numbers for the full year to March 2021 from the revised 157 million to 155 million or even 153 million, he estimates.

Ryanair is in talks with Boeing over a new aircraft order for the period from 2023 onwards, O'Leary reveals, but he says those discussions are being hindered by the airframer's "inability" to get the Max back into service. Ryanair is also in talks with Airbus, which is pricing "very aggressively" at the moment, he notes.

"Boeing is not at a point yet where we see value in a new aircraft order for the period from 2023 onwards," adds O'Leary.

He says Ryanair will be announcing base cuts and closures as a result of the Max delays over the next week or two.

It is impossible to sign up Airbus aircraft for next summer to replace the Max shortfall, he says, because there is no availability and it will hurt the pricing of second-hand A320s. The Lauda fleet of A320s is already planned to grow from 20 aircraft this summer to 32 for next summer.

[Super 80]

[moeman]

14 minutes ago, Super 80 said:

Worst case scenario, if things don't work out could Boeing just rebrand them as 737-whatevers and put the smaller engines that don't require MCAS to perform as promised back on them like previous versions had, just to get them out the door?

Edited July 29, 2019 by moeman

[Guest]

 

WestJet extends suspension of Max 8; airline seeking compensation from Boeing

 

‎Today, ‎July ‎29, ‎2019, ‏‎4 hours ago | Canadian Aviation News

News provided by Calgary Herald – link to full story

WestJet Airlines has extended its route suspensions related to the grounding of Boeing’s Max 8 aircraft and is seeking compensation from the aircraft manufacturer for lost revenue.

Amanda Stephenson, Calgary Herald July 29, 2019

WestJet Airlines has extended its route suspensions related to the grounding of Boeing’s Max 8 aircraft and is seeking compensation from the aircraft manufacturer for lost revenue.

The Calgary-based airline, which owns 13 Max 8 planes for a total of seven per cent of its fleet, announced Monday it is now scheduling without the aircraft until at least Nov. 4, as opposed to the previously stated Aug. 29. Affected routes include Halifax-Paris, Vancouver-Regina, Toronto-Kelowna and Toronto-St.John’s.

WestJet is just one of many airlines around the world that has been forced to re-accommodate guests and adjust its summer flying schedule in the absence of the Max 8, which has been grounded globally since March following two fatal crashes.

In an interview Friday, WestJet CEO Ed Sims said while the airline has no intention of flying the plane again until it is “100 per cent safe to do so,” the grounding is lasting longer than anticipated after U.S. officials identified another flaw with the plane’s software in June.

“It’s up to the regulators now to drive that pace,” Sims said. “But I’d be kidding if I said I wasn’t anything other than anxious to get that aircraft back up in the air.”

WestJet CEO Ed Sims stands in the cabin of a new Boeing 737 Max 8 in WestJet’s Calgary hanger on Thursday December 6, 2018. GAVIN YOUNG / POSTMEDIA

According to WestJet, the airline had 9,225 Max flights planned since the grounding and has been able to cover off almost 6,000 of them with other aircraft from its fleet. Including all aircraft types, WestJet has been able to maintain 98 per cent of its planned departures since March.

Still, the shortage of aircraft has meant WestJet is flying very full planes and has little flexibility in cases of weather delays or unexpected maintenance. WestJet’s ultra-low-cost carrier Swoop, which typically can borrow aircraft from its parent company in the event its own planes are undergoing maintenance, has been plagued with cancellations this summer since there is no spare capacity to be had.

On Friday, Sims said WestJet is seeking compensation for that lost capacity, though he did not provide details on what form that compensation might take.

“We have been having multiple and significant conversations along those lines. Where those conversations will lead to will remain privy between ourselves and Boeing,” Sims said. “But clearly we are one of two Boeing-exclusive jet fleets in North America and we expect that to be reflected in the conversation we have with Boeing.”

Other airlines around the world, including China’s three largest airlines, Southwest Airlines and Ryanair, are also seeking compensation from Boeing for cancelled Max 8 flights. Boeing said earlier this month it will take an after-tax charge of $4.9 billion U.S. as a result of “potential concessions and other considerations to customers” related to the grounding and associated delivery delays. While the entire estimated amount will be recognized as a charge in the second quarter, Boeing said the actual payouts will  be provided over a number of years and take “various forms of economic value.”

“We remain focused on safely returning the 737 MAX to service,” said Boeing Chairman, President and CEO Dennis Muilenburg, in a release. “This is a defining moment for Boeing. Nothing is more important to us than the safety of the flight crews and passengers who fly on our airplanes. The Max grounding presents significant headwinds and the financial impact recognized this quarter reflects the current challenges and helps to address future financial risks.”

Comments (0)

[Don Hudson]

On 7/29/2019 at 9:21 AM, moeman said:

Worst case scenario, if things don't work out could Boeing just rebrand them as 737-whatevers and put the smaller engines that don't require MCAS to perform as promised back on them like previous versions had, just to get them out the door?

hi moeman;

Boeing is between a big rock and a very hard place. May as well return to the -800 and give up the fuel savings which was the MAX's largest selling point.

Technically, the wing design & structure & pylon structure as well as ancilliary systems (controls/indicators) and documentation plus a new certification would likely present severe impediments to any such change.

The problem now is, under microscopic scrutiny, the close examination of the B737 is showing that things that were accepted as 'done to standard' by Boeing and the FAA previously, are now found wanting. Problems are being discovered which were initially passed by Boeing which itself was appointed by the FAA to act as its own "safety auditor".

A couple of examples: we haven't seen anything further on whether the trim wheel can be operated manually at high speed - that could possibly affect the certification of the single type, (all B737s). I've also read that the FAA is now examining the MAX's raised engine position with a view to disc-failure damaging the opposite engine while possibly taking out the rudder control cables if the disc-shraphnel passed through the lower fuselage. Such design is reminiscient of the DC10 center-engine disc-failure taking out all four hydraulic systems in the United 232 Sioux City crash, so the concern is real, (if unexamined, that is until now).

A more complete story from the NYTimes is on the other thread.

Edited July 30, 2019 by Don Hudson

[Super 80]

At this very moment Boeing probably just wishes they had built the 757-100 oh so many years ago. The A320 never would have found it's way to United and NWA and they would almost certainly have parity with the A321neo.

[Guest]

And the financial ripples spread.

GE warns of cash flow hit from grounded Boeing 737 Max

Published 4 hours agoUpdated 2 hours ago

Leslie Josephs@lesliejosephs

Key Points

• GE expects a $400 million hit in each of the third and fourth quarters if the 737 Max remains grounded.
• Regulators grounded the planes in mid-March following two fatal crashes.

General Electric’s cash flow took a hit from the grounded 737 Max, and the manufacturer of the engines for the popular planes warned on Wednesday that the trend would persist through 2019, as the fallout from two fatal crashes ripples through Boeing’s supply chain.

The jetliners, Boeing’s best seller, have been grounded since mid-March after the second of two crashes within five months. Together the two crashes killed 346 people.

Boeing halted deliveries of the planes and slashed production of the 737 Max by nearly a fifth to 42 a month after the grounding. GE said that prompted it to lower production of the Leap-1B engines on the planes it makes in a joint venture with French aerospace company Safran. GE said its cash flow took a roughly $600 million hit in the first half of the year and that if the grounding continues this year it would lower cash flow by $400 million per quarter in the second half of 2019.Boeing expects the planes to fly again by the end of the fourth quarter, but regulators have not said when they plan to lift the grounding. Last week, Boeing warned it could pause production of the jets altogether if there are more delays to the planes’ return, which could have a greater impact on suppliers and airline customers.

GE, which reported stronger-than-expected profits in the second quarter, has other exposure to the grounded planes through its aircraft leasing unit. The company said it has $2.1 billion in net assets tied to the Max but said it did not post any impairment charges in the first half of the year.

“We continue to monitor these developments with our airline customers, lessees and Boeing,” GE said in a securities filing.

Another Boeing 737 Max supplier, Spirit Aerosystems, said the grounding squeezed the margins on its fuselages unit. The Wichita, Kansas-based company has tried to cut costs amid the grounding by freezing hiring, offering voluntary retirements, pausing share repurchases and deferring spending.

“Making such a quick adjustment to the production schedule creates significant disruption in a complex production system like the 737,” Spirit CEO Tom Gentile said in a quarterly earnings release Wednesday. “We will continue to take full advantage of this pause in [737 Max production] rate increases to focus on improving quality, factory efficiency, and supply chain health.”

Spirit said its revenue rose 10% in the quarter ended in June, to $2 billion, thanks to higher production of Boeing 787 and 777 wide-body planes.

 

Correction: GE had a cash flow hit of about $600 million in the first half of the year from the 737 Max grounding. A previous version misstated the figure.

[blues deville]

This saga just gets worse every day. I wonder who will be the first to return their parked Max 737’s for something without this history. Returning the Max into service is going to be a PR challenge. 

[moeman]

1 hour ago, blues deville said:

This saga just gets worse every day. I wonder who will be the first to return their parked Max 737’s for something without this history. Returning the Max into service is going to be a PR challenge. 

I hope AC is first...

[mrlupin]

We were told the MAX was chosen at AC due to an approximate 10 million$ per plane purchase cost advantage...

I wonder how much of that cost advantage is left....