Boeing 737 MAX: from Suspensions to Compensations

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Severe turbulence has hit Boeing 737 MAX. Recent Ethiopian Airlines fatal crash with 157 fatalities. Links with Lion Air deadly accident which took the lives of 189. Boeing MAX program is back in the spotlight. 

For the past two weeks Boeing has been dominating the world. And not in the greatest light. Gradual suspension of the 737 MAX by regulatory authorities worldwide, decreasing confidence in MAX, growing aviation safety concerns and finally global grounding of the MAX planes.

World’s largest aerospace company, one of the premier aircraft manufacturers, is going through the hard times, indeed. While pressure is intensifying, crisis is deepening.

Airlines: from Suspensions to Compensations

Boeing still claims its MAX planes are safe. Although the trust from the flying public, regulatory authorities and airlines around the globe is shaking.

Imagine being banned from using your car. Immediately. No matter which time of the day it is, no matter what burning issues you have. Reason: safety concerns. Being forced to leave your car and look for other ways to survive without it would cause some stress, cost some time and money, would not it?

Of course, aircraft could not be compared with cars, as well as we could not be compared with airlines. Nevertheless, theoretically it is possible to try to image the scope of the problems the airlines operating Boeing 737 MAX aircraft faced or are facing in light of recent events.

Immediate groundings, rapid searches for the aircraft to replace MAX planes, distruptions in schedules, disappointed passengers and, not to be left aside, huge expenses.

Number of airlines who have Boeing 737 MAX aircraft on order announced they will keep them pending until aviation authorities issue the notice that MAX planes could go airborne again. Norwegian, Icelandair, Virgin Australia, Ukraine International Airlines and many others are waiting for investigation results to decide upon further deliveries of MAX aircraft.

Some of the airlines, including WestJet and Air Canada, tell their financial performance being hit by sudden and global grounding of Boeing 737 MAX planes.

Whereas Norwegian was the first airline to talk about seeking compensation from Boeing.

“It is quite obvious that we will not take the cost related to the new aircraft that we have to park temporarily. We will send this bill to those who produce these aircraft”, said Norwegian CEO Bjørn Kjos after grounding 18 Boeing 737 MAX aircraft.

The thing is that everyone is looking for the results of investigation of Ethiopian Airlines crash. But it could take months to determine the cause and make MAX aircraft airborne again. The longer questions will circulate, the more uncertainty it will create.

Will China Give up on Boeing 737 MAX?

The trade war between China and the US has its deep roots. Nevertheless, Boeing is among a few US companies that is not involved in the tariff crossfire to the full extent and that, according to Bloomberg, gets more than $5 billion of revenue from China.

However, now the situation might be changing. Boeing might start feeling tensions. Why?

China. China is known for its determination to use the equipment and technology that are of their own production. Aviation is not an exception. Keeping in mind that step by step China is already taking the title of the “world’s biggest aviation hub” from the US and the passengers traffic is growing at enormous paces, China is actively preparing its infrastructure to meet the demand.

Thus, there exists an opinion that China was loyal to Boeing and its aircraft due to the fact that currently it is unable to fill its aviation market with a sufficient number of own aircraft. Although it is working hard on its own narrow-body plane.

Yes, it is COMAC C919. The hard work on the narrow-body, twin-engine C919 project began in 2008, after the decades of trying to create an advanced aircraft manufacturer capable to compete with Airbus and Boeing. The roll-out of the plane is scheduled for 2021. There were doubts about its ability to compete with giants, but maybe now it is the most suitable time to enter the market?

China was the first country to ban Boeing 737 MAX 8 aircraft after Ethiopian Airlines crash.

In fact, Chinese carriers are among the biggest Boeing customers for MAX planes, counting for almost 20% of MAX deliveries worldwide through January 2019.

Obviously, the country will strive to lessen its dependence on Boeing and Airbus after COMAC starts delivering its own jets.