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Westlake Legal Group > Posts tagged "Boeing 737 Max Groundings and Safety Concerns (2019)"

Boeing 737 Max Test Flights to Begin

Westlake Legal Group boeing-737-max-test-flights-to-begin Boeing 737 Max Test Flights to Begin Regulation and Deregulation of Industry Federal Aviation Administration Boeing Company Boeing 737 Max Groundings and Safety Concerns (2019) Aviation Accidents, Safety and Disasters Airlines and Airplanes
Westlake Legal Group merlin_173995455_c15fc433-627b-4ad4-820f-f30361559ade-facebookJumbo Boeing 737 Max Test Flights to Begin Regulation and Deregulation of Industry Federal Aviation Administration Boeing Company Boeing 737 Max Groundings and Safety Concerns (2019) Aviation Accidents, Safety and Disasters Airlines and Airplanes

Boeing has received Federal Aviation Administration approval to start test flights of its 737 Max to demonstrate that it can fly safely with new flight control software. The flights, which could begin as soon as Monday, according to a person familiar with the discussions, represent a major step in the company’s effort to get its best-selling plane flying again.

The Max was grounded in March 2019 after a pair of fatal crashes — in Indonesia and Ethiopia — that killed 346 people. The resulting crisis cost Boeing billions of dollars, including compensation paid to victims and airlines. It also led to the ouster of the company’s chief executive, set off government inquiries and raised questions about the rushed effort to build and approve the Max.

The certification flights, conducted by F.A.A. pilots, will probably take place in the Seattle area, where the plane is made, over several days and include various flight maneuvers and emergency procedures to test the plane. A top Boeing test pilot will also be on the flights.

If the flights are successful, it could still be months before the planes are deemed ready to fly again. If the F.A.A. identifies further problems, Boeing may need to make additional changes. The crashes were caused in part by anti-stall software on the Max, known as MCAS, which automatically pushed the nose of the planes downward. Boeing developed a fix for the software, though regulators have identified other problems since.

F.A.A. officials will spend a week or more preparing a report detailing their findings from the flights. Once that is complete, Boeing will submit a package of materials to the agency that will include details of the new software and how it was designed and tested.

The F.A.A. — as well as an outside group of experts — will then review that submission, a process that could take weeks longer. The agency, working with international counterparts, will also determine what, if any, new training it will require for pilots. The agency can then issue orders to install the software update and allow the Max to fly again.

Even then, it will be weeks, or perhaps more than a month, before airlines can fly the Max again. The planes are in storage, and will require maintenance and testing before they are ready for commercial flights. Boeing will also have to receive approval from regulators around the world.

The Max has been grounded for longer than Boeing and the airlines initially expected. In April, Boeing said that its work on the software fix was delayed after an internal review process identified problems with the work that had been done. And the F.A.A., which has faced scrutiny from lawmakers, has been especially thorough in its review.

At a Senate hearing on June 17, lawmakers from both parties sharply criticized the F.A.A. administrator, Steve Dickson, for what some have described as a too cozy relationship with the companies the agency regulates.

“It is hard not to conclude your team at the F.A.A. has deliberately attempted to keep us in the dark,” Roger Wicker, the Republican chairman of the Commerce Committee, told Mr. Dickson. Senator Maria Cantwell, the committee’s top Democrat, meanwhile, described the agency’s communication and oversight as “fragmented.”

The Max crisis has dealt a devastating blow to Boeing’s business. In January, the company estimated that costs associated with the grounding will exceed $18 billion, but that was before the disastrous spread of the coronavirus. The three carriers in the United States that operate the Max — Southwest Airlines, American Airlines and United Airlines — have canceled thousands of flights in recent months. At Air Canada, some pilots who were licensed to fly the Max but not other planes in the carrier’s fleet, had to stop flying after the grounding.

So far this year, Boeing has seen net orders for the Max decline by more than 300 jets amid industrywide belt-tightening. In April, Southwest, Boeing’s largest single customer for the Max, said it had more than halved the number of the jets it would take this year and next, to just 48.

Boeing’s sales, profit and share price have slumped in recent months. In Renton, Wash., Boeing continues to produce the Max, though at a slower pace. With the planes grounded, Boeing has not been able to deliver the new planes, and instead is stockpiling them.

Spirit Aerosystems, a key Boeing supplier, said this month that Boeing had slashed an order for fuselage parts, cutting its request to 72 shipsets from 216 earlier this year. The aviation slowdown coupled with a recovery that could take years has led Boeing to cut about 10 percent of its work force, or about 16,000 jobs worldwide.

“The global pandemic has changed the way we live and work,” Boeing’s chief executive, David L. Calhoun, said in a note to staff in April. “It is changing our industry. We are facing utterly unexpected challenges.”

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Boeing, Expecting a Long Slump, Will Cut 16,000 Jobs

Westlake Legal Group 29virus-markets-briefing-boeing-facebookJumbo Boeing, Expecting a Long Slump, Will Cut 16,000 Jobs washington state Shutdowns (Institutional) Layoffs and Job Reductions International Trade and World Market Coronavirus (2019-nCoV) Company Reports Calhoun, David L Boeing Company Boeing 737 Max Groundings and Safety Concerns (2019) Airlines and Airplanes

The breathtaking slowdown in global aviation is taking a huge toll on Boeing, which said on Wednesday that it would slash about 16,000 jobs after reporting that revenue tumbled by 26 percent in the first three months of the year.

“The global pandemic has changed the way we live and work,” said Boeing’s chief executive, David L. Calhoun, in a note to staff. “It is changing our industry. We are facing utterly unexpected challenges.”

Airlines around the world are trying to stay alive, with losses expected to total more than $300 billion by year’s end, according to an industry trade group. As a result, many carriers are delaying purchases, deliveries and maintenance.

Boeing said it was slowing aircraft production, including for the troubled 737 Max, the 787, 777 and 777x. The company is also exploring ways to raise more capital, either from the federal government or financial markets. The job cuts, about 10 percent of Boeing’s staff, will be even steeper for those employed in the divisions most exposed to the downturn, the commercial airplanes and services businesses. Those units will see staff cuts of about 15 percent.

“I know this news is a blow during an already challenging time,” Mr. Calhoun said in the note. “I regret the impact this will have on many of you. I sincerely wish there were some other way.”

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Boeing reported a net loss of $641 million in the first quarter, compared to $2.1 billion profit a year earlier.

The company has said that it does not expect air travel to recover to levels reached before the pandemic for three years and that it would likely take several years more for travel to return to its previous long-term growth rate.

Boeing’s commercial aircraft business was especially hard hit in the first quarter by the grounding of the Max and the pandemic, with revenues for that business down nearly 50 percent to $6.2 billion in the first quarter compared to the same period last year. Total revenue dropped to $16.9 billion. The company received just 49 new orders and had 196 cancellations between January and March.

On Tuesday, Southwest Airlines said it has been negotiating a reduction in the number of 737 Max jets it will accept this year. Southwest said it would now receive no more than 48 Max jets by the end of 2021, instead of the 107 it had previously expected to take.

Boeing said it hopes to reach its job cut targets through voluntary means, including buyouts and early retirement offers. Employees who take the buyout will receive three months of health care and one week of pay for every year they have worked at Boeing, up to 26 years, the company told workers last week. Employees have until Monday to signal their interest in buyouts. If approved, they would leave in early June.

Any cuts are likely to be disproportionately focused on Boeing’s facilities in Washington State and South Carolina, home to its three major commercial aircraft manufacturing facilities. A weekslong shutdown of operations at those facilities disrupted production of passenger planes, but also affected Boeing’s defense and space business.

While Boeing itself is struggling to manage the effect of the pandemic, the company this week also expressed concern for the health of its suppliers, who receive about 70 percent of the company’s revenues.

“Currently, our team is focused on the best ways to keep liquidity flowing through our industry and to our supply chain until our customers are buying airplanes and related services again,” Mr. Calhoun told shareholders on Monday.

To that end, the company has taken out a loan, cut costs and suspended dividend payments and stock buybacks, he said. Boeing has $15.5 billion in cash on hand, but plans to raise more capital soon. In an interview on CNBC on Wednesday, Mr. Calhoun did not specify whether some of that would be in the form of federal aid.

On Wednesday, Boeing also said that it had suffered more than $2 billion in one-off costs in the first quarter.

A slower than expected ramp up in production of the 737 Max, which was grounded last year after two fatal crashes, subtracted about $1 billion from its bottom line. And the company incurred a pretax charge of $827 million for the KC-46A Tanker, most of it stemming from repairs Boeing agreed to make this month following discussions with the U.S. Air Force.

The company took a $336 million charge for repairs on the 737 Next Generation aircraft and the four-week suspension of work at Boeing’s facilities in Washington State cost the company about $137 million.

Over the weekend, Boeing also announced that it was terminating its $4.2 billion deal to buy an 80 percent stake of Embraer’s commercial jet business. Embraer is contesting that move and said Monday it had begun arbitration proceedings.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Boeing Faces $20 Million Fine by F.A.A.

Westlake Legal Group 06BOEING1-facebookJumbo Boeing Faces $20 Million Fine by F.A.A. Rockwell Collins Inc Regulation and Deregulation of Industry House Committee on Transportation Fines (Penalties) Federal Aviation Administration Boeing Company Boeing 737 Max Groundings and Safety Concerns (2019) Airlines and Airplanes

The Federal Aviation Administration recommended on Friday that Boeing be fined nearly $20 million for installing equipment in the 737 Max and other aircraft before its approval.

The announcement came hours after Democrats on the House Transportation Committee slammed both the company and the agency for failing to ensure the safety of the Max jets. Two of the planes crashed in 2018 and 2019, killing 346 people and leading to the model’s worldwide grounding.

The F.A.A. accused Boeing of installing the equipment, the Head-Up Guidance System from Rockwell Collins, on nearly 800 jetliners from June 2015 to April 2019. The systems included sensors that had not been tested or approved when they were installed, though Rockwell Collins later conducted the necessary testing and risk analysis, the agency said in a statement.

In response, Boeing noted that the proposed $19.68 million fine did not involve a safety issue and said a review had found that the systems “met or exceeded” the original requirements.

“We understand the critical importance of compliance with all documentation requirements of the F.A.A.’s certifications,” the company said. “We are committed to doing better.”

The agency accused Boeing of installing the systems in 618 Boeing 737 NGs and 173 Max planes. Boeing has 30 days to respond to the recommendation. Typically, the final details of such penalties are worked out in legal negotiations between the agency and the offending party.

The F.A.A. proposed a $5.4 million fine in January after it accused Boeing of installing substandard components in the Max and other aircraft. That fine has not yet been made final.

Earlier in the day, the House Transportation Committee’s Democratic majority issued preliminary findings from a yearlong investigation into the Max disasters. The majority staff accused Boeing of overlooking safety in the interest of meeting production goals, making misguided assumptions about flight-control software known as MCAS and hiding information from the F.A.A., the public and Boeing customers, among other things. The report also accused F.A.A. management of yielding to Boeing’s influence and rejecting the safety concerns of its own experts.

“Our committee’s investigation will continue for the foreseeable future, as there are a number of leads we continue to chase down to better understand how the system failed so horribly,” the committee’s Democratic chairman, Representative Peter DeFazio of Oregon, said in a statement.

The Democrats also argued that Congress should change the F.A.A.’s aircraft certification process. The committee’s Republican minority agreed that there were problems with the process and said it was open to bipartisan legislation, but dismissed the idea that the system was “broken or in need of wholesale dismantlement.”

The report was released just before the March 10 anniversary of the crash of a Max jet, Ethiopian Airlines Flight 302, that killed all 157 people on board.

“We have cooperated extensively for the past year with the committee’s investigation,” Boeing said in a statement about the findings. “We will review this preliminary report.”

Also on Friday, David L. Calhoun, Boeing’s chief executive, emailed senior leaders at the company to apologize for remarks he made in a New York Times article published on Thursday.

In the interview, Mr. Calhoun sharply criticized Boeing’s former chief executive, Dennis Muilenburg, saying he ramped up production rates before the supply chain was ready and angered regulators with overly optimistic projections about the return of the 737 Max.

“I am both embarrassed and regretful about the article,” Mr. Calhoun wrote in the email. “It suggests I broke my promise to former CEO Dennis Muilenburg, the executive team and our people that I would have their back when it counted most. I want to reassure you that my promise remains intact.”

Mr. Calhoun, who was on Boeing’s board for the duration of Mr. Muilenburg’s tenure as chief executive, sought to soften his criticism of his predecessor. He added that he did the interview “in the interest of demonstrating transparency and straight talk about our leadership point of view and current situation.”

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‘It’s More Than I Imagined’: Boeing’s New C.E.O. Confronts Its Challenges

FLORISSANT, Mo. — In his eight weeks on the job, Boeing’s chief executive, David L. Calhoun, has come to one overriding conclusion: things inside the aerospace giant were even worse than he thought.

In a wide-ranging interview this week, Mr. Calhoun criticized his predecessor in blunt terms and said he was focused on transforming the internal culture of a company mired in crisis following two crashes that killed 346 people.

To get Boeing back on track, Mr. Calhoun said he was working to mend relationships with angry airlines, win back the confidence of international regulators and appease an anxious President Trump — all while moving as quickly as possible to get the grounded 737 Max back in the air.

“It’s more than I imagined it would be, honestly,” Mr. Calhoun said, describing the problems he is confronting. “And it speaks to the weaknesses of our leadership.”

Boeing’s previous chief executive, Dennis A. Muilenburg, was fired in December after presiding over a series of embarrassing setbacks that culminated in the shutdown of the 737 factory this year.

Mr. Calhoun formally took over in January, but he has been involved in this mess from the beginning. A protégé of Jack Welch from his time at General Electric, Mr. Calhoun has been on Boeing’s board since 2009, and was elevated to chairman late last year.

Before becoming the chief executive, he had vigorously defended Mr. Muilenburg, saying in a CNBC appearance in November that Mr. Muilenburg “has done everything right” and should not resign. One month later, the board ousted Mr. Muilenburg and announced Mr. Calhoun as his replacement.

“Boards are invested in their C.E.O.s until they’re not,” said Mr. Calhoun, sitting in a dim conference room at the Boeing Leadership Center, a corporate campus outside St. Louis where Mr. Muilenburg’s photo is still displayed prominently.

“We had a backup plan,” he added. “I am the backup plan.”

ImageWestlake Legal Group merlin_163519638_8218926c-95ea-4e8d-9b71-4d201d31311a-articleLarge ‘It’s More Than I Imagined’: Boeing’s New C.E.O. Confronts Its Challenges Muilenburg, Dennis A Calhoun, David L Boeing Company Boeing 737 Max Groundings and Safety Concerns (2019) Aviation Accidents, Safety and Disasters Airlines and Airplanes

Dennis Muilenberg, the former Boeing president and chief executive, at a hearing last year on Capitol Hill.Credit…Mandel Ngan/Agence France-Presse — Getty Images

Now that he’s in charge, Mr. Calhoun has become more willing to openly criticize Mr. Muilenburg. He said the former chief executive turbocharged Boeing’s production rates before the supply chain was ready, a move that sent Boeing shares to an all-time high but compromised quality.

“I’ll never be able to judge what motivated Dennis, whether it was a stock price that was going to continue to go up and up, or whether it was just beating the other guy to the next rate increase,” he said, adding later, “If anybody ran over the rainbow for the pot of gold on stock, it would have been him.”

Mr. Muilenburg declined to comment.

Mr. Calhoun and the rest of Boeing’s board never seriously questioned that strategy, in part because before the first Max crash off the coast of Indonesia in October 2018, the company was enjoying its best run in years. What’s more, the board believed that Mr. Muilenburg, an engineer who had been at Boeing for his entire career, was so deeply informed about the business that he was a good judge of the risks involved in ramping up production.

“If we were complacent in any way, maybe, maybe not, I don’t know,” Mr. Calhoun said. “We supported a C.E.O. who was willing and whose history would suggest that he might be really good at taking a few more risks.”

It was only after the Max was grounded last March following a crash in Ethiopia that Mr. Muilenburg’s optimistic approach became viewed as a liability. Airlines grew livid after he repeatedly voiced overly optimistic timetables about when the Max would return to service. The head of the Federal Aviation Administration, Stephen Dickson, was so frustrated that he reprimanded Mr. Muilenburg in a private meeting and publicly told F.A.A. employees to resist pressure from the company.

“They felt like they were being pushed into a timeline,” Mr. Calhoun said of the F.A.A., adding that the “regulator was never there alongside of us, but apparently our team didn’t quite come up to grips with that.”

One of Mr. Calhoun’s initial tasks as chief executive was to go on an apology tour, holding a series of what he called “greet-and-mend opportunities.” The first stop was the White House.

At a private meeting with Mr. Trump on Mr. Calhoun’s third day on the job, the president told him that he liked Mr. Muilenburg, but believed a leadership change was needed. The president said he hoped Boeing was investing all of its resources into getting the plane back in the air.

“He wants us to get back on our horse,” Mr. Calhoun said. “He wants us to get the Max flying again, safely.”

Mr. Calhoun said he recently asked Boeing employees to “lay out in gory detail what needed to be done” to get the plane certified. “And then when they told me exactly what that was, I added a day or two to it,” he said.

His conclusion was that the Max might be approved some time this summer, pushing back again the likely return of the plane by six months.

“Restoring credibility with the F.A.A. was not as hard as people think,” he said, “They just didn’t want to be boxed in anymore. They were sick of it.”

While he has been contrite about damaging internal messages released in January, Mr. Calhoun stopped short of saying that the company has systemic cultural problems. He called the messages, in which Boeing employees ridiculed the F.A.A. and denigrated their own colleagues, “totally unacceptable,” but said they were not representative of Boeing more broadly. “I see a couple of people who wrote horrible emails,” he said.

He also delicately maneuvered between accepting responsibility for the two crashes and pointing the finger elsewhere.

When designing the Max, the company made a “fatal mistake” by assuming pilots would immediately counteract a failure of new software on the plane that played a role in the Lion Air and Ethiopian Airlines accidents. But he implied that the pilots from Indonesia and Ethiopia, “where pilots don’t have anywhere near the experience that they have here in the U.S.,” were part of the problem, too.

Asked whether he believed American pilots would have been able to handle a malfunction of the software, Mr. Calhoun asked to speak off the record. The Times declined to do so.

“Forget it,” Mr. Calhoun then said. “You can guess the answer.”

He dismissed concerns about the board’s decision to give him a $7 million bonus based in part on whether the Max returned to service. “The objective is to get the Max up safely,” he said. “Period.”

When asked why he didn’t elect to forgo his salary altogether, he said, “Cause I’m not sure I would have done it.”

Pulling Boeing out of the hole it has dug will take years, Mr. Calhoun said. At a meeting with his senior leadership team on Tuesday, Mr. Calhoun introduced a new set of values intended to guide the company, which he hopes will inspire employees still working on getting the 737 Max back in service.

“You don’t just win this one,” he said. “You don’t just go out and fight and win and now you’re a hero. One airplane at a time.”

In the meantime, Mr. Calhoun is focused on the basics: producing jets at a pace the factory can handle, instilling discipline up and down the company, and hunting for bad news and acting on it.

“If I don’t accomplish all that,” he said, “then you can throw me out.”

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Three U.S. Airlines Extend Halt on Boeing 737 Max Flights

Westlake Legal Group 14max1-facebookJumbo Three U.S. Airlines Extend Halt on Boeing 737 Max Flights United Continental Holdings Inc United Airlines Southwest Airlines Company Boeing Company Boeing 737 Max Groundings and Safety Concerns (2019) Airlines and Airplanes

All three U.S. carriers that use Boeing’s 737 Max jetliner have again put off returning the plane to their schedules.

On Friday, United Airlines said it would operate without the jet until Sept. 4, while American Airlines said it would do so through Aug. 17. Southwest Airlines said Thursday that it would do likewise through Aug. 10.

The three airlines had previously said they expected to bring the 737 Max back in June, but none had provided a formal update since Boeing said last month that it did not expect regulatory approval to fly the jet until June or July. Once approval is granted, airlines will have to prepare the planes and train pilots, which would take weeks.

United said Friday that its decision allowed it to plan service during the peak summer travel season with greater certainty, even if regulators clear the 737 Max to fly sooner.

After it reported quarterly earnings call last month, Andrew Nocella, United’s chief commercial officer, said the company did not expect to fly the Max this summer. United has 14 of the 737 Max jets in its fleet. Sixteen more have been produced for the airline, with 155 on order.

Southwest said Thursday that it had chosen to extend its suspension of 737 Max flights in light of “continued uncertainty around the timing” of the jet’s return to service. American said it would formally change its schedule later this month and notify customers whose trips were affected.

The Max has been grounded worldwide after two crashes, in late 2018 and early 2019, killed a total of 346 people. An automated anti-stall system called MCAS was identified as a common factor in the disasters.

To fly again, the 737 Max must overcome a series of hurdles. Boeing will have to resolve several issues in collaboration with regulators, including fixing the problems associated with MCAS and determining whether the company needs to separate wire bundles that could, in rare cases, short circuit and possibly lead to catastrophic failure. Regulators will then have to test the plane and determine how pilots should be trained to fly it.

The problems with the 737 Max have created an opportunity for Airbus, Boeing’s European rival, but Airbus has such a lengthy backlog that it cannot immediately benefit from Boeing’s troubles.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Three U.S. Airlines Extend Halt on Boeing 737 Max Flights

Westlake Legal Group 14max1-facebookJumbo Three U.S. Airlines Extend Halt on Boeing 737 Max Flights United Continental Holdings Inc United Airlines Southwest Airlines Company Boeing Company Boeing 737 Max Groundings and Safety Concerns (2019) Airlines and Airplanes

All three U.S. carriers that use Boeing’s 737 Max jetliner have again put off returning the plane to their schedules.

On Friday, United Airlines said it would operate without the jet until Sept. 4, while American Airlines said it would do so through Aug. 17. Southwest Airlines said Thursday that it would do likewise through Aug. 10.

The three airlines had previously said they expected to bring the 737 Max back in June, but none had provided a formal update since Boeing said last month that it did not expect regulatory approval to fly the jet until June or July. Once approval is granted, airlines will have to prepare the planes and train pilots, which would take weeks.

United said Friday that its decision allowed it to plan service during the peak summer travel season with greater certainty, even if regulators clear the 737 Max to fly sooner.

After it reported quarterly earnings call last month, Andrew Nocella, United’s chief commercial officer, said the company did not expect to fly the Max this summer. United has 14 of the 737 Max jets in its fleet. Sixteen more have been produced for the airline, with 155 on order.

Southwest said Thursday that it had chosen to extend its suspension of 737 Max flights in light of “continued uncertainty around the timing” of the jet’s return to service. American said it would formally change its schedule later this month and notify customers whose trips were affected.

The Max has been grounded worldwide after two crashes, in late 2018 and early 2019, killed a total of 346 people. An automated anti-stall system called MCAS was identified as a common factor in the disasters.

To fly again, the 737 Max must overcome a series of hurdles. Boeing will have to resolve several issues in collaboration with regulators, including fixing the problems associated with MCAS and determining whether the company needs to separate wire bundles that could, in rare cases, short circuit and possibly lead to catastrophic failure. Regulators will then have to test the plane and determine how pilots should be trained to fly it.

The problems with the 737 Max have created an opportunity for Airbus, Boeing’s European rival, but Airbus has such a lengthy backlog that it cannot immediately benefit from Boeing’s troubles.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

As Boeing Jets Sit Idle, Airbus Can’t Make Planes Fast Enough

Westlake Legal Group 13airbus-1-facebookJumbo As Boeing Jets Sit Idle, Airbus Can’t Make Planes Fast Enough Faury, Guillaume Factories and Manufacturing Company Reports Boeing Company Boeing 737 Max Groundings and Safety Concerns (2019) Airlines and Airplanes Airbus Industrie

PARIS — The troubles plaguing Boeing after the yearlong grounding of its 737 Max plane have created an unusual opening for its chief rival, Airbus, to swoop in and grab business. There’s just one hitch: Airbus is in no position to benefit.

The European aerospace giant, which last year took the title from Boeing as the world’s biggest plane maker, has such a large backlog of orders to fill that it cannot immediately produce more of its popular narrow-body jets that airlines view as an alternative to the Max.

“It might look like a paradox, but in the short term, we don’t benefit from the situation with our competitor,” Airbus’s chief executive, Guillaume Faury, said Thursday at a news conference in Toulouse, France, announcing the company’s 2019 annual results.

Airbus has been unable to take advantage of the shortfall at Boeing partly because it can’t build planes fast enough. Production of Airbus’s A320 jets — the main competitor to the 737 Max and the bulk of Airbus’s commercial business — is months behind schedule because of slowdowns at some of its European factories.

As it is, the company’s A320 jets are sold out through 2025, Mr. Faury said, making it “difficult if not impossible” to make new planes quickly for airlines that have been left scrambling to find an alternative since Boeing stopped producing the Max.

Even so, in the long-running duel between the two rivals for the top spot in commercial aviation, Airbus is riding high.

In the year since Boeing’s most important plane was grounded after two deadly crashes killed 346 people, orders for the Max have dried up, and Boeing has been unable to deliver the roughly 400 Max planes it built since the grounding began in March.

Last month, Boeing said the costs associated with the Max grounding were likely to exceed $18 billion. Those costs may rise further, with airlines that were counting on the Max continuing to lose money and the 737 factory in Renton, Wash., still shut down.

Boeing said this week that it did not record any new orders for commercial airplanes in January, and that it delivered just 13 planes in the month. Though the start of the year is usually a slow time for orders, and the deliveries were dented by the Max grounding, the dismal numbers were a reminder of the depths of Boeing’s problems. It was the first time in decades that Boeing failed to record any commercial orders in January.

Airbus has won several competitive orders in recent months. In December, Qantas picked Airbus over Boeing to supply jets for what will be the world’s longest nonstop commercial routes, from Australia to the New York area. Also last year, United Airlines ordered 50 Airbus jets.

Still, on Thursday, Airbus reported an overall loss of 1.36 billion euros, or $1.48 billion, for 2019. The main reason for the shortfall was an agreement to pay $4 billion in fines to France, Britain and the United States to settle a lengthy global corruption investigation, removing a legal cloud as it sought to keep ahead of Boeing.

Despite the hit, Airbus reported record deliveries in 2019 of 863 commercial aircraft, up from 800 in the year before, and an increase in orders to 768 jets, from 747, as Boeing stumbled. With the Max grounded, Airbus also sought to shore up its advantage in the narrow-body market by raising its stake in the A220, a jet developed by Bombardier, a Canadian plane maker.

Delivering on orders is Airbus’s biggest challenge. Mr. Faury said the company planned to ramp up production of the A320neo, its best-selling single-aisle jet and an alternative to the Max, to around 67 a month in 2023, up from a target of 63 a month in 2021. Suppliers had balked when Airbus sought to accelerate the timetable further, he noted.

But analysts said splashing money on increasing production might be a problem if it made the planes more expensive, or if Airbus had to slow production again.

“They’re going to end up effectively over-geared,” said Andrew Charlton, the managing director at the consulting firm Aviation Advocacy. “They’re going to have all these people, factory lines that they’re going to have to shut down again.”

For now, however, even if Airbus continued to produce planes at the same rate, it is likely to stay ahead of Boeing, said Richard Aboulafia, vice president for analysis at Teal Group. “By doing nothing, they’re doing a great deal,” he said. “Market trends are benefiting them hugely.”

Airlines have focused on flying point to point, rather than routing through giant hubs, a shift that led to the sunsetting of the Airbus A380, one of the world’s largest jets. For these sorts of flights, airlines prefer to use planes from the Airbus A320 family or the Boeing 737 Max 8 — and at the moment, all the orders are for Airbus A320-type planes, Mr. Aboulafia said.

“This is the best of all worlds for Airbus,” he said. “It’s an enviable position.”

The Max crisis is also affecting Boeing in ways that go beyond immediate costs, lost orders and delayed deliveries. Plans for the company’s next major commercial airplane have effectively been put off.

“There is a benefit to Airbus from the Max grounding,” said Scott Hamilton, managing director of Leeham, an aviation consultancy. “It has delayed any decision by Boeing for a new midmarket airplane.”

Still, the Max could be flying soon. The head of the Federal Aviation Administration said last week that a critical test flight could happen in the next few weeks, setting in motion the complex process of clearing the plane’s return to service. If no other major problems with the Max are found, airlines could be using the plane for commercial flights this summer.

And when that happens, Boeing can start delivering its stockpiled jets, and could start logging new orders for the Max again.

“When the 737 Max is released and cleared for flying, it’s going to be the safest airplane in the world,” Mr. Charlton said, pointing out that British Airways placed an order for 200 Max planes in June after the second fatal crash. “There’s going to be no bit of that airplane that hasn’t been crawled over a million times.”

If Boeing then opts to offer heavy discounts, Airbus could be forced to do the same. Airlines can seek discounts after their planes have been ordered.

“Suddenly, their order book becomes a burden, not an asset,” he said.

Liz Alderman reported from Paris, and David Gelles from New York. Amie Tsang contributed reporting from London.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Boeing Expects 737 Max Costs Will Surpass $18 Billion

Westlake Legal Group 29boeing1-facebookJumbo Boeing Expects 737 Max Costs Will Surpass $18 Billion Company Reports Calhoun, David L Boeing Company Boeing 737 Max Groundings and Safety Concerns (2019) Aviation Accidents, Safety and Disasters Airlines and Airplanes

Boeing on Wednesday said the costs associated with the grounding of the 737 Max were likely to surpass $18 billion, a significant increase over earlier forecasts.

The new estimate, announced during Boeing’s quarterly earnings report, is the company’s most recent approximation of just how expensive it will be to return the Max to service, compensate airline customers and restart the shuttered 737 factory.

Boeing continues to grapple with the fallout from the crashes of two Max jets in 2018 and 2019, which killed 346 people, leading to the worldwide grounding of the plane in March. In addition to the rising costs, the company is contending with a new chief executive, the temporary shutdown of the 737 factory and a range of challenges in other parts of the business.

Boeing on Wednesday said that the costs associated with shutting down and restarting the factory would amount to some $4 billion. The decision to temporarily halt production of the Max was only made last month, and Boeing had not previously given guidance on what the move would cost.

The company also said that the cost of compensating airlines that have suffered lost sales as a result of the grounding of the Max was now expected to reach $8.3 billion, up from a previous estimate of $5.6 billion. That figure represents a mixture of cash payments to airlines, as well as discounts on future sales.

And Boeing said that as a result of the grounding, which has lasted nearly a year now, it expected the overall cost to produce the 737 Max to rise to $6.3 billion in the years ahead, up from an earlier estimate of $3.6 billion.

In total, the anticipated costs now equal more than $18.6 billion, or nearly 20 percent of Boeing’s annual sales before the Max was grounded.

The Max crisis continued to weigh on the company’s financial results. Revenue for the quarter was $17.9 billion, down 37 percent from the same time a year earlier, before the jet was grounded.

Boeing also said it would incur a charge of $410 million as a result of its botched rocket launch late last year, when a space capsule it designed for NASA failed to reach the correct orbit.

This was the company’s first quarterly earnings report with David L. Calhoun at the helm, following the ouster of the previous chief executive, Dennis A. Muilenburg.

Since taking over this month, Mr. Calhoun has tried to set himself apart from Mr. Muilenburg, who was pushed out after alienating airline customers and the Federal Aviation Administration with overly optimistic projections about when the Max would return to service.

“We recognize we have a lot of work to do,” Mr. Calhoun said in a statement. “We are focused on returning the 737 Max to service safely and restoring the long-standing trust that the Boeing brand represents with the flying public. We are committed to transparency and excellence in everything we do.”

There is still no precise timeline for the return of the Max. Last week, Boeing said it did not expect regulators to approve the plane to fly until June or July, though that estimate was conservative. If regulators do not find any additional problems with the plane, the Max could return to service before then, though new issues cropped up earlier in the process.

The company has enjoyed rare bits of good news in recent weeks. It successfully completed the first flight test of the 777X, its new wide-body jet. And the trade deal that the White House struck with China included a commitment for the sale of new American aircraft to Chinese customers.

Yet Boeing still faces enormous challenges. The grounding of the Max is costing the company many billions of dollars, and costs are still rising. The fatal crashes and a cascade of damning revelations have badly damaged Boeing’s reputation, and the company’s own research shows 40 percent of regular travelers are unwilling to fly the Max. Other Boeing programs, including its work for NASA and the United States military, are behind schedule.

The Max is Boeing’s most important product, representing hundreds of billions of dollars in expected future sales. But just over a year after it was introduced in 2017, a Max crashed off the coast of Indonesia, after a new automated system triggered based on data from a faulty sensor. Less than five months later, a second Max crashed in Ethiopia under similar circumstances, leading to the worldwide grounding.

That has thrust Boeing into the biggest crisis in its history and led to the temporary shuttering of its 737 factory in Renton, Wash. Boeing has developed a software update and has been working with regulators to win approval to return the plane to service. But the grounding is now likely to last a year.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Boeing Expects 737 Max Costs Will Surpass $18 Billion

Westlake Legal Group 29boeing1-facebookJumbo Boeing Expects 737 Max Costs Will Surpass $18 Billion Company Reports Calhoun, David L Boeing Company Boeing 737 Max Groundings and Safety Concerns (2019) Aviation Accidents, Safety and Disasters Airlines and Airplanes

Boeing on Wednesday said the costs associated with the grounding of the 737 Max were likely to surpass $18 billion, a significant increase over earlier forecasts.

The new estimate, announced during Boeing’s quarterly earnings report, is the company’s most recent approximation of just how expensive it will be to return the Max to service, compensate airline customers and restart the shuttered 737 factory.

Boeing continues to grapple with the fallout from the crashes of two Max jets in 2018 and 2019, which killed 346 people, leading to the worldwide grounding of the plane in March. In addition to the rising costs, the company is contending with a new chief executive, the temporary shutdown of the 737 factory and a range of challenges in other parts of the business.

Boeing on Wednesday said that the costs associated with shutting down and restarting the factory would amount to some $4 billion. The decision to temporarily halt production of the Max was only made last month, and Boeing had not previously given guidance on what the move would cost.

The company also said that the cost of compensating airlines that have suffered lost sales as a result of the grounding of the Max was now expected to reach $8.3 billion, up from a previous estimate of $5.6 billion. That figure represents a mixture of cash payments to airlines, as well as discounts on future sales.

And Boeing said that as a result of the grounding, which has lasted nearly a year now, it expected the overall cost to produce the 737 Max to rise to $6.3 billion in the years ahead, up from an earlier estimate of $3.6 billion.

In total, the anticipated costs now equal more than $18.6 billion, or nearly 20 percent of Boeing’s annual sales before the Max was grounded.

The Max crisis continued to weigh on the company’s financial results. Revenue for the quarter was $17.9 billion, down 37 percent from the same time a year earlier, before the jet was grounded.

Boeing also said it would incur a charge of $410 million as a result of its botched rocket launch late last year, when a space capsule it designed for NASA failed to reach the correct orbit.

This was the company’s first quarterly earnings report with David L. Calhoun at the helm, following the ouster of the previous chief executive, Dennis A. Muilenburg.

Since taking over this month, Mr. Calhoun has tried to set himself apart from Mr. Muilenburg, who was pushed out after alienating airline customers and the Federal Aviation Administration with overly optimistic projections about when the Max would return to service.

“We recognize we have a lot of work to do,” Mr. Calhoun said in a statement. “We are focused on returning the 737 Max to service safely and restoring the long-standing trust that the Boeing brand represents with the flying public. We are committed to transparency and excellence in everything we do.”

There is still no precise timeline for the return of the Max. Last week, Boeing said it did not expect regulators to approve the plane to fly until June or July, though that estimate was conservative. If regulators do not find any additional problems with the plane, the Max could return to service before then, though new issues cropped up earlier in the process.

The company has enjoyed rare bits of good news in recent weeks. It successfully completed the first flight test of the 777X, its new wide-body jet. And the trade deal that the White House struck with China included a commitment for the sale of new American aircraft to Chinese customers.

Yet Boeing still faces enormous challenges. The grounding of the Max is costing the company many billions of dollars, and costs are still rising. The fatal crashes and a cascade of damning revelations have badly damaged Boeing’s reputation, and the company’s own research shows 40 percent of regular travelers are unwilling to fly the Max. Other Boeing programs, including its work for NASA and the United States military, are behind schedule.

The Max is Boeing’s most important product, representing hundreds of billions of dollars in expected future sales. But just over a year after it was introduced in 2017, a Max crashed off the coast of Indonesia, after a new automated system triggered based on data from a faulty sensor. Less than five months later, a second Max crashed in Ethiopia under similar circumstances, leading to the worldwide grounding.

That has thrust Boeing into the biggest crisis in its history and led to the temporary shuttering of its 737 factory in Renton, Wash. Boeing has developed a software update and has been working with regulators to win approval to return the plane to service. But the grounding is now likely to last a year.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Boeing Expects 737 Max Costs Will Surpass $18 Billion

Westlake Legal Group 29boeing1-facebookJumbo Boeing Expects 737 Max Costs Will Surpass $18 Billion Company Reports Calhoun, David L Boeing Company Boeing 737 Max Groundings and Safety Concerns (2019) Aviation Accidents, Safety and Disasters Airlines and Airplanes

Boeing on Wednesday said the costs associated with the grounding of the 737 Max were likely to surpass $18 billion, a significant increase over earlier forecasts.

The new estimate, announced during Boeing’s quarterly earnings report, is the company’s most recent approximation of just how expensive it will be to return the Max to service, compensate airline customers and restart the shuttered 737 factory.

Boeing continues to grapple with the fallout from the crashes of two Max jets in 2018 and 2019, which killed 346 people, leading to the worldwide grounding of the plane in March. In addition to the rising costs, the company is contending with a new chief executive, the temporary shutdown of the 737 factory and a range of challenges in other parts of the business.

Boeing on Wednesday said that the costs associated with shutting down and restarting the factory would amount to some $4 billion. The decision to temporarily halt production of the Max was only made last month, and Boeing had not previously given guidance on what the move would cost.

The company also said that the cost of compensating airlines that have suffered lost sales as a result of the grounding of the Max was now expected to reach $8.3 billion, up from a previous estimate of $5.6 billion. That figure represents a mixture of cash payments to airlines, as well as discounts on future sales.

And Boeing said that as a result of the grounding, which has lasted nearly a year now, it expected the overall cost to produce the 737 Max to rise to $6.3 billion in the years ahead, up from an earlier estimate of $3.6 billion.

In total, the anticipated costs now equal more than $18.6 billion, or nearly 20 percent of Boeing’s annual sales before the Max was grounded.

The Max crisis continued to weigh on the company’s financial results. Revenue for the quarter was $17.9 billion, down 37 percent from the same time a year earlier, before the jet was grounded.

Boeing also said it would incur a charge of $410 million as a result of its botched rocket launch late last year, when a space capsule it designed for NASA failed to reach the correct orbit.

This was the company’s first quarterly earnings report with David L. Calhoun at the helm, following the ouster of the previous chief executive, Dennis A. Muilenburg.

Since taking over this month, Mr. Calhoun has tried to set himself apart from Mr. Muilenburg, who was pushed out after alienating airline customers and the Federal Aviation Administration with overly optimistic projections about when the Max would return to service.

“We recognize we have a lot of work to do,” Mr. Calhoun said in a statement. “We are focused on returning the 737 Max to service safely and restoring the long-standing trust that the Boeing brand represents with the flying public. We are committed to transparency and excellence in everything we do.”

There is still no precise timeline for the return of the Max. Last week, Boeing said it did not expect regulators to approve the plane to fly until June or July, though that estimate was conservative. If regulators do not find any additional problems with the plane, the Max could return to service before then, though new issues cropped up earlier in the process.

The company has enjoyed rare bits of good news in recent weeks. It successfully completed the first flight test of the 777X, its new wide-body jet. And the trade deal that the White House struck with China included a commitment for the sale of new American aircraft to Chinese customers.

Yet Boeing still faces enormous challenges. The grounding of the Max is costing the company many billions of dollars, and costs are still rising. The fatal crashes and a cascade of damning revelations have badly damaged Boeing’s reputation, and the company’s own research shows 40 percent of regular travelers are unwilling to fly the Max. Other Boeing programs, including its work for NASA and the United States military, are behind schedule.

The Max is Boeing’s most important product, representing hundreds of billions of dollars in expected future sales. But just over a year after it was introduced in 2017, a Max crashed off the coast of Indonesia, after a new automated system triggered based on data from a faulty sensor. Less than five months later, a second Max crashed in Ethiopia under similar circumstances, leading to the worldwide grounding.

That has thrust Boeing into the biggest crisis in its history and led to the temporary shuttering of its 737 factory in Renton, Wash. Boeing has developed a software update and has been working with regulators to win approval to return the plane to service. But the grounding is now likely to last a year.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com